Newsquawk Daily European Opening News - 23rd June 2025

• US President Trump confirmed the launch of “Operation Midnight Hammer”, which involved targeted strikes on Iranʼs nuclear facilities at Fordow, Natanz, and Isfahan.


• US President Trump warned that “many targets remain,” emphasising that the US had no desire for regime change but threatened larger future strikes if Iran failed to engage diplomatically.


• The Iranian parliament has approved the closure of the Strait of Hormuz after the US launched strikes against the countryʼs nuclear facilities. Iranʼs security body will make the final decision on whether to proceed with the plan, state television reported. 


• Iran is weighing its response, with its Foreign Minister saying “all options” are on the table after Washington proved “they only understand the language of threat and force”, according to CNN.


• US President Trump to meet with National Security team at 13:00 EDT/18:00 BST on Monday, according to Bloomberg. Separately, a special IAEA board meeting is also scheduled for Monday.


• Initial market reaction saw crude higher, havens bid and equity futures softer; however, the move has since largely dissipated, potentially on hopes the strike is a "one and done" situation.


• Looking ahead, highlights include French, German, EZ, UK, US Flash PMIs, ECB President Lagarde; Fed’s Goolsbee, Kugler, Supply from EU, Trump's National Security meeting.


• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• 
  US stocks saw choppy trade amid quad-witching as participants returned from the Juneteenth market holiday, but ultimately closed lower on Friday amid fluid geopolitics alongside two notable trade updates: 1) WSJ reporting US prepares action targeting allies' chip plants in China, 2) Japan scraps US meeting after Washington demands more defence spending, via FT.


• 
  Sectors saw mixed performance, with Energy, Staples, and Utilities gaining, while Communications and Materials saw losses.


• 
  SPX -0.22% at 5,968, NDX -0.43% at 21,626, DJI +0.08% at 42,207, RUT -0.17% at 2,109


• Click here for a detailed summary.

ISRAEL-IRAN

US Strike Operations

• 
  US President Trump confirmed the launch of “Operation Midnight Hammer”, which involved targeted strikes on Iran’s nuclear facilities at Fordow, Natanz, and Isfahan. The operation used 125 aircraft, including seven B-2 bombers, alongside submarine-launched Tomahawk cruise missiles.


• Fourteen GBU-57 Massive Ordnance Penetrators ("bunker busters") were deployed to penetrate deeply buried targets, notably Fordow.


• Satellite imagery confirmed significant infrastructure damage at all three nuclear sites, with Fordow showing six fresh craters.


• 
  All targets were reportedly struck between 23:40 BST (Saturday) and 00:05 BST (Sunday). Iran’s air defence systems failed to detect or intercept the incoming attacks.


• 
  Trump described the attack as a joint effort with Israel, saying they “worked as a team like perhaps no team has ever worked before.”


• Axios quoted officials as saying that Whitkov told Araqchi during the operation that “the strike is only once.” He confirmed that Washington was still seeking a diplomatic solution and wanted Tehran to return to negotiations.


• 
  US President Trump did not want to continue striking Iran, but he would do so if US bases were targeted, according to Sky News Arabia citing Axios.


• 
  US President Trump reportedly directed staff to announce a two-week window in order to conceal plans for the Iran attack, according to CNN sources.

Damage Assessment & Nuclear Risk

• IAEA Director General Grossi said craters are visible at Fordow, Natanz suffered direct hits, and tunnel entrances at Isfahan were struck. Full underground damage assessment remains pending. A special IAEA board meeting is scheduled for Monday.


• Chairman of the Joint Chiefs Gen. Dan Caine stated it is “too early” to assess whether Iran’s nuclear capability was fully neutralised.


• US intelligence officials have raised concerns Iran may have relocated enriched uranium stockpiles in advance.


• 
  US Secretary of State Rubio urged Iran to surrender its enriched uranium stockpiles, claiming they remain buried under Isfahan and likely were not moved before the strikes.


• 
  The IAEA reported no signs of a radiation leak. Saudi Arabia’s Nuclear and Radiological Regulatory Authority confirmed no radioactive effects were detected in Gulf states.

Strait of Hormuz & Oil Flow Threat

• The Iranian parliament has approved the closure of the Strait of Hormuz after the US launched strikes against the country’s nuclear facilities. Iran’s security body will make the final decision on whether to proceed with the plan, state television reported.


• 
  US Secretary of State Rubio warned such a move would be “economic suicide” for Iran but remains a credible escalation vector.


• 
  NOTE: Market contacts have suggested OPEC+ have not had any calls, with no talks of an emergency meeting yet amid no signs of supply disruptions, yet.

Iranian Military Response

• Iran launched retaliatory missile strikes on Tel Aviv and Haifa, Israel, resulting in at least 86 reported injuries.


• Iranian officials have warned that future actions could target over 20 US bases or naval assets in the region.


• 
  Iran stated that its military would determine the timing, nature, and scale of its response, according to Reuters.


• 
  Signs have emerged of Iran‑backed militias preparing to attack US bases in Iraq and Syria, according to Sky News Arabia citing The New York Times.


• Iranian air defences reportedly activated in Isfahan, targeting hostile Israeli aircraft.


• 
  Iranian forces reported that Israeli airstrikes killed nine personnel — seven Revolutionary Guards and two conscripts — in Yazd province.

Iranian Messaging

• 
  Iran is weighing its response — with its Foreign Minister saying “all options” are on the table after Washington proved “they only understand the language of threat and force”, according to CNN.


• Supreme Leader Khamenei warned that US strikes would “result in irreparable damage” to the US.


• Iran’s President Pezeshkian warned of a “more devastating” retaliation if Israel’s bombing campaign continued.


• Iranian regime sources denied any major nuclear material loss from the strikes, implying the sites had been pre-emptively evacuated.


• 
  Iran’s Crisis Management HQ stated there was “no danger” to civilians near Fordow; state media reported the site had “long been evacuated.”


• An adviser to Khamenei claimed Iran still retains its enriched uranium, indigenous nuclear knowledge, and political will, despite facility damage.


• Iran’s Foreign Minister condemned the strikes as a violation of international law and the Nuclear Non-Proliferation Treaty.


• 
  The Iranian Atomic Energy Organisation called the attacks “a barbaric act” breaching international law.

International Reactions

• 
  The UN Security Council held an emergency meeting at 20:00 BST on Sunday in response to the strikes. US Ambassador Dorothy Shea defended the operation; China, Russia, and Pakistan called for an immediate ceasefire and accused the US of breaching the UN Charter.


• 
  The UN and EU called for de-escalation, with Secretary-General António Guterres warning of a “dangerous escalation.”


• The E3 (UK, France, Germany) released a joint statement urging Iran to return to nuclear negotiations and warning against further destabilising actions.


• 
  Gulf Arab states including Qatar, Saudi Arabia, and Kuwait condemned the US strikes, calling for restraint and diplomatic resolution.


• 
  UK PM Keir Starmer backed the US strike, describing it as a response to a “grave threat.”


• 
  Israeli PM Netanyahu praised the US action, calling it a display of “awesome and righteous might” that could “change history.”


• 
  Saudi Arabia, Oman, and India expressed concern and urged all sides to pursue diplomatic solutions.

US Political & Legal Fallout

• 
  Congressional response to the strikes was mixed. Most Republicans expressed support, with Senator Ted Cruz praising the operation. However, some dissent emerged within the party, notably from Representative Marjorie Taylor Greene, who stated, “Not our fight.” Democrats strongly criticised the move; Senator Bernie Sanders labelled it “grossly unconstitutional” and accused President Trump of bypassing Congress.


• 
  US Department of Justice said President Trump had the authority under Article II to order Iran strikes without congressional approval, but a prolonged conflict might require Congress’s involvement, according to CNN.


• 
  US President Trump to meet with National Security team at 13:00 EDT/18:00 BST on Monday, according to Bloomberg.

Trump on Truth Social

• 
  US President Trump posted on Sunday "The damage to the Nuclear sites in Iran is said to be “monumental.” The hits were hard and accurate. Great skill was shown by our military. " Trump added that "if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn’t there be a Regime change", and that "The GREAT B-2 pilots have just landed, safely, in Missouri."


• 
  President Trump later posted "Monumental Damage was done to all Nuclear sites in Iran, as shown by satellite images. Obliteration is an accurate term!... The biggest damage took place far below ground level. Bullseye!!!"

US Homeland Security & Domestic Threats

• 
  The US is on high alert for Iranian-backed terrorist attacks, especially in the 48 hours following the strike. FBI, DHS, and local law enforcement have increased security presence at places of worship in major cities including New York and Washington, DC.


• 
  DHS warned of a heightened domestic threat environment, including potential for cyberattacks or lone-wolf incidents inspired by religious rulings.


• The White House is monitoring potential Iranian sleeper cells inside the US.


• 
  VP Vance stated the administration is watching known terror watch list individuals who entered during the Biden era.

Regional Axis Responses/Headlines

• 
  Iranian Foreign Minister Araghchi arrived in Moscow to consult with President Putin. Russia condemned the US strikes as a “flagrant violation of international law.”


• 
  Iran's Foreign Minister Araqchi said he would discuss tackling common challenges and threats with Russian President Putin, according to Iranian news agency SNN.


• 
  Hezbollah condemned the US strikes, calling them a violation of international and humanitarian law and warned the conflict could spiral globally.


• A Yemeni Houthi official warned retaliation for the US attack was “only a matter of time.”

TRADE/TARIFFS

• 
  Japan scrapped a planned US meeting after Washington demanded higher defence spending, according to FT sources on Friday. US Secretary of State Rubio and Defence Secretary Hegseth had been scheduled to meet Japan’s Defence Minister Nakatani and Foreign Minister Iwaya in Washington on 1 July. Tokyo cancelled the meeting after the US requested Japan raise its defence spending target to 3.5%, up from an earlier request of 3%.


• 
  US President Trump said on Friday that it looks like the US would make trade deals with India and Pakistan, according to Reuters.


• 
  Japanese, South Korean, New Zealand, and Australian leaders will meet US President Trump at NATO, according to Nikkei.


• 
  IMF Managing Director Georgieva said global growth was forecast to slow down but no recession yet; IMF forecasts to be released in July, according to Bloomberg TV.


• 
  Japanese PM Ishiba is reportedly planning to skip NATO attendance, according to Kyodo.

APAC TRADE

EQUITIES

• 
  APAC stocks traded lower with sentiment hit after weekend developments which saw the US carry out missile strikes against Iranian nuclear facilities in a surprise move.


• 
  ASX 200 declined 0.8% in tandem with broader sentiment, with participants overlooking the improvement in Flash PMIs.


• 
  Nikkei 225 fell 0.5%, though losses were somewhat cushioned by a weaker JPY on account of the stronger USD, with regional Flash PMIs largely shrugged off.


• 
  Hang Seng and Shanghai Comp conformed to broader regional losses, with the focus largely on geopolitics. Chinese sentiment was further hampered by Friday's WSJ report that the US is reportedly preparing action targeting allies' chip plants in China.


• 
  US equity futures were softer but off the worst levels seen at the resumption of trade, possibly on hopes that the US strike was a "one and done" situation. However, any attacks on US bases or assets in the region by Iran or proxies risk further deterioration in sentiment amid the likelihood of a US response to an Iranian retaliation. ES futures down 0.3%.


• 
  European equity futures were indicative of a softer cash open with the Euro Stoxx 50 future -0.5% after cash closed +0.7% on Friday.

FX

• 
  DXY saw firmer trade following the US' surprise strike on Iran over the weekend, which took the index from Friday's 98.77 close to a peak of 99.17 in APAC trade, with some strength seen around the Chinese open. The index was choppy throughout the latter half of the session on either side of 99.00


• 
  EUR/USD was dragged lower by the Dollar but came off worst levels, trading within a 1.1454–1.1507 range.


• 
  GBP/USD was similarly hit by the Buck, residing in a 1.3392–1.3441 range after briefly dipping under its 50DMA at 1.3400.


• 
  USD/JPY was supported by the Dollar, with the JPY failing to hold onto its geopolitical risk premium seen at the open. USD/JPY eventually testing 147.00 to the upside overnight (vs 145.88 low), with the 100DMA at 146.79 also breached.


• 
  Antipodeans were subdued by the risk tone, with the Aussie seeing no reaction to its overall improvement in Flash PMIs. AUD/USD and NZD/USD both fell 0.2%, with high-beta FX moving in lockstep with broader risk sentiment.


• PBoC set USD/CNY mid-point at 7.1710 vs exp. 7.1914 (prev. 7.1695)


• 
  Indonesian central bank said it is to continue intervening in offshore onshore NDF spot FX markets to ensure the rupiah reflects fundamentals, according to an official.

FIXED INCOME

• 
  10yr UST futures were subdued possibly on inflation-related implications amid the rise in oil prices.


• 
  Bund futures were similarly pressured with eyes on EZ inflation as the Iranian-Israel conflict underpinned oil and gas prices.


• 
  10yr JGB futures were softer in tandem with peers, with JGBs also continuing to feel headwinds from the lack of trade progress with the US.


• 
  Australia sold AUD 1bln 1.75% 2032 AGB; b/c 3.35x (prev. 3.21x), Average yield 3.9441% (prev. 4.008%).

COMMODITIES

• 
  Crude futures were firmer but off best levels, with WTI gapping +6% before trimming gains, possibly on hopes that the US strike was a "one and done" situation. However, any attacks on US bases or assets in the region by Iran or proxies may further deteriorate risk amid the likelihood of a US response to an Iranian retaliation. Furthermore, some noted no current supply shifts from the weekend updates and no current known dialogue between OPEC.


• 
  Spot gold gave up earlier gains as the Dollar continued to rise, with the yellow metal finding resistance around USD 3,390/oz before finding support near USD 3,350/oz.


• 
  Copper futures were lower amid the broader risk tone and the rise in the Dollar.


• 
  Baker Hughes Rig Count: Oil -1 at 438, Natgas -2 at 111, Total -1 at 554.


• 
  Russian President Putin on Friday said OPEC+ is increasing oil output gradually. He noted that the situation in the Middle East had led to an increase in oil prices, but the rise was not significant. He added that there was no need for OPEC+ to intervene yet, according to Reuters.


• 
  The LME determined that it was appropriate, under current circumstances, to amend existing lending rules by introducing "front month lending rules". It had been closely monitoring large positions across multiple contracts in recent months. The exchange stated that these changes to the lending rules were temporary and would be reviewed as appropriate by the special committee, according to Reuters.

CRYPTO

• 
  Bitcoin briefly dipped under USD 100k over the weekend following the US attack on Iran, but traded on a USD 101k handle throughout the APAC session.

NOTABLE ASIA-PAC HEADLINES

• 
  PBoC injected 220.5bln via 7-day reverse repos with the rate maintained at 1.40%.

DATA RECAP

• 
  Australian Flash Manufacturing PMI (Jun) 51.0 (Prev. 51.0); Services PMI 51.3 (Prev. 50.6); Composite PMI 51.2 (Prev. 50.5)


• 
  Japanese JibunBK Manufacturing PMI Flash SA (Jun) 50.4 (Prev. 49.4); Services 51.5 (Prev. 51.0); Composite 51.4 (Prev. 50.2)


• 
  Indian Flash Manufacturing PMI (Jun) 58.4 (Exp, 57.7, Prev. 57.6), Services 60.7 (Exp. 58.5, Prev. 58.8), Composite 61 (Exp. 59.4, Prev. 59.3)

CENTRAL BANKS

• 
  Fed's Barkin (2027 voter) on Friday said he sees no rush to cut interest rates and is not ready to dismiss the inflation risk from tariffs. He stated that a spike in inflation could not be ignored if it occurred, noting that price indices remained above target. He added that there was nothing urgent in the data warranting a rate cut at this point, with the job market and consumption holding up. Barkin said firms expected to raise prices later in the year as more expensive imported goods worked into inventories. Even firms not directly impacted by tariffs see confusion over trade policy as an opportunity to raise prices for other reasons. He acknowledged having no conviction on where trade policy would ultimately settle or how it would affect prices and jobs. He added that firms remain in a wait-and-see mode on capital spending and hiring plans, according to Reuters.


• 
  Fed’s Daly (2027 voter) on Friday said things were balanced and suggested looking more to the fall, rather than July, for a possible rate cut, in a CNBC interview. She stated that the economy and policy are currently in a good place, and concerns about tariffs on inflation were not as large as when they were first announced. Daly noted it was great news that inflation continued to decline. She said that without tariffs, the Fed would be considering rate normalisation, but they needed to continue monitoring policies going forward. There were many possibilities regarding how much of the tariffs would pass through to consumers. Daly said the fundamentals of the economy were moving to a point where an interest rate cut might become necessary. It was possible, she added, that they could get a meaningful impact on inflation—or that tariffs might not impact inflation as much as feared. She mentioned CEOs had shown cautious optimism on tariffs. Unless the labour market falters, she reiterated, the fall looked more appropriate for a rate cut. She concluded that there was a lot to be said for the view that tariffs would have a one-time effect on inflation, but it was too early to make that call now.

GEOPOLITICS

ISRAEL-IRAN - Friday Headlines

• 
  A top general said the IDF is prepared for a prolonged campaign, according to Bloomberg.


• 
  Iran’s Presidential Spokesman said Iran would not stop uranium enrichment for peaceful purposes, but that concessions were possible, according to CNN.


• 
  US President Trump presided over a national security meeting on Iran at the White House, according to Reuters citing a US official. US Envoy Witkoff was in regular contact with the Iranians and was also engaging with Qatar as an intermediary.


• 
  No progress had been made with the Iranians in the Geneva talks, according to Sky News Arabia citing Israel Hayom and a US diplomatic source.


• 
  In a statement following talks with Iran, the E3/EU foreign ministers expressed their view that all sides should refrain from taking steps that could lead to further escalation in the region. They reiterated longstanding concerns about Iran’s expansion of its nuclear programme, stating it had no credible civilian purpose, and urged the pursuit of a negotiated solution to ensure that Iran never obtained or acquired a nuclear weapon. The ministers expressed willingness to meet again in the future, shared their support for continued discussions, and welcomed ongoing US efforts to seek a negotiated solution, according to Reuters.


• 
  Iran's Foreign Minister said Iran saw a serious and respectful discussion taking place on Friday with E3 and EU and was ready to consider diplomacy once again. He stated that Iran was prepared to return to diplomatic talks as soon as Israel stopped its attacks and that Iran would continue to exercise its legitimate right to self-defence. He added that Iran supported continued discussions with the E3 and the EU and was prepared to meet again in the near future. He reaffirmed that Iran’s nuclear programme was peaceful and monitored by the IAEA, and made it clear that Iran’s defence capabilities were not negotiable, according to Reuters.


• 
  WSJ's Norman said the talks had clearly involved substantive discussions. The Europeans raised and discussed a range of issues and definitely tried to float ideas aimed at moving the nuclear talks forward. However, fundamentally, there was no progress. He added that a meeting between Iran’s Foreign Minister and US Envoy Witkoff appeared no closer. Iran gave no indication that it was more willing to consider zero enrichment than before. While all parties were aware of the timeline, no date had been set for a follow-up meeting between Europe and Iran.

RUSSIA-UKRAINE

• 
  US President Trump said on Friday Russia and Ukraine were making progress, according to Reuters.

OTHERS

• 
  The UK and its NATO allies agreed to increase spending on defence and related areas to 5% of GDP by 2035, according to two diplomatic sources cited by Sky News.

LATAM

• 
  Mexican President Sheinbaum said Pemex provider debt would normalise in July under a reform, according to Reforma.


• 
  The Colombian army said 57 soldiers were kidnapped in the country's southwest, according to Reuters.

23 Jun 2025 - 06:25- EquitiesGeopolitical- Source: Newsquawk