Zero Rss

"This May Be Iran's First Misstep - And Proof Leverage Isn't Total"

Brent and WTI futures extended declines on Tuesday morning as momentum continued toward an end to the US-Iran conflict. The latest signs of de-escalation include a U.S. waiver allowing some crude and fuel sales from Iran, while Tehran said $12 billion in frozen funds had been released as part of ongoing talks with U.S. negotiators.

Both sides have signaled progress so far this week, further eroding the war premium in crude markets as traders begin to price in the flood of Iranian barrels hitting global markets, normalization of the Hormuz chokepoint, and a broader easing of geopolitical risk across the Persian Gulf.

Strait of Hormuz, this morning.

• 04:03 UTC: a cluster of commercial vessels holding convoy formation ahead of transit.
• 06:45 UTC: the same vessels underway and crossing south of Larak. pic.twitter.com/F1Yj9e0l7Q

— Windward (@WindwardAI) June 23, 2026

Brent fell to $77 a barrel after sliding 3.3% on Monday, while WTI traded around $73 a barrel.

On the Hormuz front, ship traffic continued to normalize as an increasing number of tankers and cargo ships broadcast their transponders on the critical waterway, signaling growing confidence among owners, traders, and insurers after last week's U.S.-Iran interim deal.

Maritime intelligence firm Windward posted part of a briefing on X early Tuesday, stating: "25 transits on June 22, including French- and Qatari-linked LNG carriers moving openly with AIS active. Iranian exports hit a two-month high of 6.79M barrels."

Continued:

• Iran reinstated PGSA toll and clearance requirements on June 21, attempting to re-close the Strait of Hormuz.
• Despite the announcement, 25 AIS-visible transits were recorded on June 22, including French- and Qatari-linked LNG carriers.
• Kharg Island resumed multi-berth crude loading, with Iranian exports reaching 6.79 million barrels during the week ending June 21, the highest level in nearly two months.
• A cluster of 17 tankers, including 10 OFAC-sanctioned vessels, was observed operating in the southeastern Hormuz corridor.
• Fujairah and Khor Fakkan remained heavily congested as operators continued waiting for clarity on transit conditions.
• Windward identified an extensive sanctions-evasion network linked to 38 vessels expelled from the Cameroon registry.

Iran moved to re-close Hormuz on June 21. The market answered.

Windward Maritime AI™ recorded 25 transits on June 22, including French- and Qatari-linked LNG carriers moving openly with AIS active. Iranian exports hit a two-month high of 6.79M barrels.

Operators are testing… pic.twitter.com/ruFW3HpTxB

— Windward (@WindwardAI) June 23, 2026

Eurasia Group senior analyst Gregory Brew commented on Windward's report, indicating, "This may be Iran's first misstep—and proof that its leverage isn't total. Iran announced the strait was closed, but it didn't *close* the strait. Without the credible threat of force, Iran's sway over the waterway has limits."

This may be Iran's first misstep--and proof that its leverage isn't total.

Iran announced the strait was closed, but it didn't *close* the strait.

Without the credible threat of force, Iran's sway over the waterway has limits. https://t.co/ox3aiiMWoL

— Gregory Brew (@gbrew24) June 23, 2026

To note, Brew is Eurasia Group's Iran and energy analyst, and if his assumption is correct, Tehran's massive leverage tool over global energy markets by closing Hormuz may be eroding.

Tyler Durden Tue, 06/23/2026 - 10:25

US Manufacturing Hits 49-Month High As 'Input Costs Show Signs Of Cooling'

This morning we found out that Euro-area business activity shrank less than anticipated in June (Services up/beat, Manufacturing down/miss).

S&P Global’s Composite PMI rose to 49.5 from 48.5, topping estimates but remaining below the 50 mark that indicates growth.

"The eurozone economy is showing enough resilience to just about stay out of recession. "

However, the UK’s economy contracted for a second consecutive month (both Services and Manufacturing lower), with its PMI slipping to a 14-month low.

"A disappointing June ‘flash’ PMI indicates that the economy contracted for a second successive month, albeit at only a 0.1% rate and merely flat-lining over the second quarter as a whole."

And despite the recent weakness in 'hard' data, expectations were for an incrementally positive rise in the US Composite PMI in preliminary June data (with Services up and Manufacturing down).

Forecasters under-estimated the US economic resilience with both Manufacturing (55.7 vs 54.6 exp vs 55.1 prior) and Services (51.3 vs 51.1 exp vs 50.3 prior) both rising and beating expectations.

Manufacturing is at a 49-month high and Services at a 4-month high with a positive trend over the past 3 months...

Source: Bloomberg

“Brighter news out of the Middle East has helped restore some confidence among US businesses in June", said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, "though the overall rate of economic growth signalled by the flash PMI survey remains relatively sluggish compared to that seen earlier in the year in the lead up to the conflict."

The survey signals that current output levels are consistent with the economy struggling to grow much faster than a 1% annualized rate in the second quarter.

The service sector continues to grow at an especially subdued pace, reflecting push-back from customers over high prices amid low levels of consumer confidence in particular.

While there is better news from the manufacturing sector, Williamson remains concerned that factory growth continues to be temporarily buoyed by inventory building amid supply fears.

Supply delays grew more widespread in June.

Williamson says that “most worrying was the further fall in employment, notably in the manufacturing sector."

Factory job cuts are running at the highest since 2009 if the pandemic is excluded, reflecting concerns over the sustainability of the recent upturn in demand alongside worries over the escalating cost of raw materials.

However, while still running at one of the highest rates seen over the past four years, input cost inflation has shown sign of cooling in June thanks in part to the lower energy prices seen at the tail end of the survey data collection period.

Tyler Durden Tue, 06/23/2026 - 09:56

Here Is The Korean Article That Sent Memory Stocks Tumbling And Sparked A Global Selloff

Early last night, just around the time Korean stocks opened at a new all time high, we highlighted an article in Korea's Chosun Biz, which eventually became the catalyst for the sharp repricing lower of memory stocks - and since memory stocks account for about 60% of the Kospi, sparked the 10% crash in the South Korean market which culminated with a mandatory halt of trading - and sparked a risk off wave around the globe. 

"Since production forecasts for NVIDIA's next-generation chip 'Rubin,' which will be equipped with HBM4, are trending downwards, there is no reason to accelerate the transition to HBM." - Chosunhttps://t.co/tOYfVXObQw

— zerohedge (@zerohedge) June 23, 2026

As both CNBC and Bloomberg write this morning, "traders are pointing to a South Korean media report saying SK Hynix is slowing expansion of AI memory chip production and shifting emphasis to commodity DRAM."

What exactly is the article saying? The punchline was the following:

"An official familiar with SK Hynix stated, 'SK Hynix management cannot help but be mindful that their competitor (Samsung Electronics) is already generating massive profits from general-purpose DRAM rather than HBM.'" The official explained, "Since production forecasts for Nvidia's next-generation chip 'Rubin,' which will be equipped with HBM4, are also trending downward, there is no reason to accelerate the transition to HBM."

The slowdown in HBM4 (or high bandwidth memory) rollout which is critical for high end AI racks, was - naturally - spun as a positive event and was justified as SK Hynix moving back to DDR memory production, which somehow is now higher margin, but the bottom line is simple: supply for high end HBM is slowing which in turn has prompted questions whether this is due to a cartel-like attempt to control pricing (probably not very smart to admit this), or more likely, in response to problems with the rollout of high end Nvidia systems, and especially the Vera Rubin racks which as we reported a month ago are emerging as extremely expensive, primarily because of the surge in memory prices which are crushing hyperscaler margins.

Here is the full Chosun article:

SK Hynix Adjusts HBM4 Production Speed… Seeking Additional Revenue by Increasing General-Purpose DRAM Amid Supply Shortages

• General Purpose DRAM Surpasses HBM in Operating Profit Margin… "90% Possible" 
• "SK Hynix Needs Only to Defend HBM Market Share"
• Opportunity for Samsung Electronics to Increase HBM Market Share

SK Hynix is ​​shifting its focus to the general-purpose DRAM market while adjusting the pace of mass production expansion for 6th generation High Bandwidth Memory (HBM4). The explanation is that, having already solidified an overwhelming advantage with HBM sales accounting for over 40% of total revenue, the company is adjusting its resource allocation to secure additional profits in the general-purpose DRAM market, where supply shortages are severe, rather than engaging in excessive competition for capacity expansion.

According to industry sources on the 23rd, SK Hynix is ​​reportedly delaying the conversion of some 5th-generation HBM (HBM3E) production lines, which were originally scheduled to transition to HBM4. The company plans to secure additional profits by increasing its responsiveness to the general-purpose DRAM market, which currently records higher operating profit margins than HBM. The industry view is that this decision is based on the judgment that there is no need to rush the transition to HBM4 and HBM4E (7th-generation HBM), given that the company has already secured a solid position in the HBM market.

Behind this strategic shift lies the reversal in profitability between general-purpose DRAM and HBM. As of the first quarter of this year, the price per gigabit (Gb) of general-purpose DRAM still lags behind that of HBM, but the gap in operating profit margins is estimated to have already widened to more than 15 percentage points (P). Daishin Securities projected that the operating profit margin for general-purpose DRAM could reach a theoretical peak of 90% within the year.

"An official familiar with SK Hynix stated, 'SK Hynix management cannot help but be mindful that their competitor (Samsung Electronics) is already generating massive profits from general-purpose DRAM rather than HBM.'" The official explained, "Since production forecasts for Nvidia's next-generation chip 'Rubin,' which will be equipped with HBM4, are also trending downward, there is no reason to accelerate the transition to HBM."

The perspective of overseas investment banks (IBs) also supports this trend. Goldman Sachs assessed that it would be sufficient for SK Hynix to maintain a dominant position of over 50% in HBM3 (4th generation HBM) and HBM3E (5th generation HBM) until at least 2026. Morgan Stanley identified the overall memory price cycle, rather than the defense of HBM market share, as the key driver of SK Hynix's value, and raised its earnings forecast by 56–63% based on the projection that the average selling price of DRAM will rise by 62% by 2026.

In fact, SK Hynix announced in its first-quarter earnings report that the average selling price (ASP) of DRAM had risen to the mid-60% range and presented a plan to focus on meeting demand for high-density server modules and mobile products. The signing of a three-year DDR5 supply contract with Microsoft (MS) is also interpreted as a move to secure long-term earnings visibility in general-purpose DRAM.

On the other hand, as SK Hynix moves to control HBM4 production volume, the possibility of its competitor Samsung Electronics rising in market share is also increasing. According to Counterpoint Research, SK Hynix’s HBM market share stood at 57% in the fourth quarter of last year, but there is talk of a potential gradual contraction; furthermore, it is observed that if Samsung Electronics succeeds in mass-producing HBM4 in the second half of this year, SK Hynix’s share could drop to the 50–60% range.

Tyler Durden Tue, 06/23/2026 - 09:40

US Airlines Set To Pocket $40 Billion As Jet Fuel Prices Crash

By Alex Kimani of OilPrice.com

US airlines stand to save billions in dollars on jet fuel costs after the US-Iran peace deal sent oil prices sharply lower.

Brent crude was trading around $78 per barrel, the lowest price since the start of the war, after Washington and Tehran agreed to a ceasefire and committed to 60 days of negotiations, while jet fuel spot prices fell to $2.85 a gallon, down sharply from $4.88. 

The dip in fuel costs could slash the U.S. airline industry’s annual fuel bill by more than $40 billion, easing the pressure on carriers who were facing margin pressures and a painful earnings squeeze. 

The International Air Transport Association (IATA) previously warned that exploding fuel costs would halve global airline net profits in 2026 to $23 billion. 

However, unlike previous oil price downcycles, airlines are unlikely to pass on these cost savings to passengers in the form of lower air fares. 

According to Raymond James, average domestic airfares booked one week prior to travel were up 9% week-over-week and 34.1% from a year earlier as of June 8.  In previous fuel cycles, dropping oil prices usually triggered capacity expansion that pushed fares lower; however, the current market is operating under different dynamics. First off, jet fuel prices rose three times faster than ticket prices between January and May, slapping carriers with $100 billion in extra fuel costs after oil prices spiked amid the Iran war. This implies that airlines are likely to use this windfall to stabilize their balance sheets. 

Second, tight airport capacity, aircraft delivery delays and weaker low-cost carriers are likely to limit a broader domestic fare war. 

Global aircraft backlogs are currently at record highs, with deliveries lagging roughly 30% behind peak levels. Domestic airline capacity in the United States has largely stagnated, with current projections that airline seats will grow just 0.4%Y/Y in the third quarter, down from expectations of 4.6% growth before the war.

Tyler Durden Tue, 06/23/2026 - 09:30

Primoris Services Crashes Again As Guidance Cut And Mgmt Missteps Spook Wall Street

Shares of Primoris Services crashed in premarket trading after the infrastructure contractor slashed its full-year earnings outlook (again) and announced the departure of its chief operating officer.

The specialty construction and infrastructure contractor, which builds, maintains, and engineers critical infrastructure for utilities, energy, renewables, pipelines, power generation, industrial, chemical, oil and gas, civil infrastructure, and data-center power projects, blamed the guidance cut on weakness in its renewables business, where full-year revenue is now expected to fall about 30% from 2025 levels.

Primoris lowered its adjusted earnings forecast to $2.05 to $2.60 a share, well below the prior $4.80 to $5 range and the $4.74 Bloomberg consensus estimate. Adjusted EBITDA is now expected to be $275 million to $325 million, down from a previous range of $480 million to $500 million.

"The Company is also anticipating lower revenue and gross profit for the full year 2026, primarily driven by lower expected revenue and gross profit in the Renewables business,"the company wrote in a press release. The warning comes as the Trump administration has focused on dialing back solar and wind projects in favor of reliable fossil-fuel power generation to shore up the fragile grid after an era of disastrous climate policies by the Biden-Harris regime.

Snapshot of full-year forecast (courtesy of Bloomberg):

• Sees adjusted EPS $2.05 to $2.60, saw $4.80 to $5, estimate $4.74 (Bloomberg Consensus)
• Sees adjusted Ebitda $275 million to $325 million, saw $480.0 million to $500.0 million, estimate $477.1 million
• Sees EPS $1.30 to $1.85, saw $4.05 to $4.25

Shares tumbled 34% in premarket trading, one month after plunging 50% on disappointing results and a guidance cut. As of Monday's close, the stock was down 13% this year.

Institutional commentary:

1. Wolfe Research analyst Steve Fleishman commented on the dismal earnings: "Painful second guidance cut following several signs indicating another blow up. The good news, it's still just the six solar projects. Credibility concerns remain, but the $2B of bookings highlight demand remains as strong as ever for E&Cs."

2. KeyBanc analyst Sangita Jain noted, "We need to step away until a clear picture of the underlying renewables business emerges and steps to right the ship become evident."

3. Guggenheim analyst Joseph Osha wrote, "We reiterate our Buy rating and support for PRIM's stock following the relatively predictable cut to numbers yesterday. The company's CEO and board have made a series of significant mistakes in our view, but those mistakes do not reduce the underlying value of PRIM's businesses, especially those outside of the troubled renewable segment. Our price target continues to stand at $162."

4. JPMorgan analyst Mark Strouse published his first take, indicating, "First Take: Digging a Hole; PRIM Significantly Lowers Guidance Again, More Leadership Changes."

Strouse provided clients with an adjusted EBITDA midpoint guidance pathway that management has laid out to investors over the course of the year, showing a significant rerating lower as execution problems in the renewables segment worsened.

Analysts tracked by Bloomberg show 10 "Buy" ratings, 4 "Neutrals," and 1 "Sell", with a $140 average 12-month price target.

2025 and 2026 gains have been mostly wiped out.

Certaintly Primoris has evaporated all confidence from the market with a series of material downside surprises to guidance over the last several months.

Tyler Durden Tue, 06/23/2026 - 09:10

Oracle Cuts 21,000 Jobs As AI Adoption Deepens And Credit Risk Flashes GFC-Era Highs

Oracle disclosed in a Form 10-K filing that it reduced its workforce by 21,000 employees over the past year as it automates white-collar jobs and frees up cash to splurge on AI infrastructure buildouts.

"Our periodic workforce restructurings and reorganizations can be disruptive,"  Oracle said in the annual financial regulatory publsihed on Monday, adding, "We have an existing restructuring plan in place under which we have made, and will continue to make, adjustments to our workforce in response to management changes, product changes, performance issues, changes in strategies, acquisitions and other internal and external considerations."

It noted, "We may initiate new restructuring plans in the future. In addition, the adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce."

The filing detailed how the tech giant ended its fiscal year with 141,000 full-time employees, down from 162,000 a year earlier. Costs associated with the workforce reduction totaled around $1.8 billion.

The labor cuts come as Oracle faces pressure amid its $55.7 billion capital expenditure spending spree in fiscal 2026, which is almost entirely tied to its AI cloud and data center buildout. That was up from $21.2 billion in fiscal 2025, meaning capex more than doubled year over year.

For fiscal 2027, Oracle is guiding even higher: about $70 billion in capex, plus another $20 billion to $25 billion of spending that it expects customers to repay. That implies up to $95 billion for AI and data-center capex in the current fiscal year.

Bloomberg was the first to report in March that Oracle planned to cut its workforce as it aggressively spent on AI data center buildouts.

Wall Street analysts forecast that the cloud unit's data center spending will drive Oracle's cash flow negative through the end of the decade, with a payoff not expected until 2030. In January, Oracle announced plans to raise $50 billion in debt and equity.

ORCL 5 Year CDS exploded to record highs ...

ORCL 5 Year CDS vs. Oracle equity 

The labor restructuring should come as no surprise, as we cited Barclays earlier this year, which proposed that the "next step" for Oracle to drive free cash flow would be to lay off between 20,000 and 30,000 employees.

Read:

• A Panicking Oracle Plans To Raise Up To $50 Billion, As Its Stock And Bonds Crater
• Oracle Firing Tens Of Thousands As CDS Explodes To Financial Crisis Record
• Oracle Prepares To Axe Thousands Of Jobs In New Layoff Round

Oracle has joined the growing party of tech giants, including Meta, Alphabet, Microsoft, Amazon, Xai, and others, that have outlined AI capex plans this year, collectively totaling $800 billion.

Last month, Meta axed some 8,000 jobs as the great "white-collar purge" continues across corporate America. AI has led to about 50,000 layoffs so far this year in the US, with IBM and Salesforce announcing large cuts.

Related:

• 20 College Majors Most Exposed To AI Job Disruption

Oracle appears to be using labor restructuring to start digging itself out of the considerable hole it has dug, with more layoffs likely this year.

Tyler Durden Tue, 06/23/2026 - 08:30

Israel Sets 3 Key 'Conditions' For Ending Occupation Of South Lebanon

Via The Cradle

Israel has set several “conditions” for the withdrawal of its occupation forces from Lebanon, Hebrew newspaper Israel Hayom reported this week – after Tel Aviv was forced to stop bombing the country due to the US–Iran agreement. 

"Israel has three minimum conditions for withdrawing its forces from southern Lebanon: the withdrawal of all Hezbollah terrorists north of the Litani River; the dismantling of Hezbollah … infrastructure south of the Litani; and full Israeli freedom of action to remove threats," the report said.

via Reuters

At the same time, Israel will continue to insist on maintaining a "defensive strip" in the country, senior officials told the outlet. 

The Israel Hayom report claims that occupation forces have surrounded a fortified underground complex at Ali al-Taher Hill, located east of Nabatieh and north of the Litani River. 

Ali al-Taher Hill is a highly strategic location overlooking the city of Nabatieh. Israel has been attempting to capture the area, but has faced fierce resistance and has been engaged in heavy battles over the area for several weeks. 

Israel Hayom and other Hebrew reports say the area holds an important command center for Hezbollah operations.

The report claimed resistance fighters are besieged there and that “Israel's security establishment do not know how long the trapped terrorists will be able to hold out underground, but what is clear is that the military is preventing them from coming out.”

The Israeli army “does not intend to withdraw from the site until those terrorists are eliminated or surrender, followed by the destruction of the underground infrastructure.”

Unofficial reports and observers on social media say that the complex in question may be Hezbollah’s famous Imad-4 facility, which serves as a key command and weapons storage site.

Israel Hayom claims troops “are now positioned at all the entrances to the concrete, fortified command post,” adding that “dozens of terrorists underground are under growing distress, and it is no coincidence that they are activating Iran, which is demanding that the US force Israel into a ceasefire in Washington.”

The report comes after a brutal Israeli escalation in Lebanon over the weekend, which killed at least 100 people. Major clashes between Israeli troops and Hezbollah resistance fighters also raged throughout the weekend before a cessation of hostilities was imposed on Tel Aviv by Tehran’s pressure on Washington. 

Five Israeli occupation soldiers, including a battalion chief, were killed by the Shia resistance fighters between Thursday and Saturday – including four who burned to death in their tank.

Hezbollah has denied Israeli claims that its fighters are besieged, saying such reports were designed to boost the morale of Israeli forces after their failure to advance in the area.

Israeli officials continue to publicly reject withdrawal and are vowing that Tel Aviv’s forces will remain in the so-called ‘security zone’ in south Lebanon. “We don’t have territorial ambitions in Lebanon, but we will not withdraw from the security zone and expose our citizens to Hezbollah’s attacks and possible invasion,” says Israeli Foreign Minister Gideon Saar. 

His comments coincided with a CNN report saying Israel was considering “symbolic” withdrawals from “minor areas” in south Lebanon.

Israeli Finance Minister Bezalel Smotrich had said a day earlier that Tel Aviv will maintain an occupation in Lebanon for years. "We are there until Hezbollah disarms, and I think also beyond that, because we need defendable borders,” he said in an interview. 

🇮🇱🇱🇧 New Evidence Regarding an Underground Hezbollah Facility in the Ali a-Taher Area

While it had previously been widely believed that the sprawling underground complex in the Ali a-Taher ridge area was a strategic Hezbollah facility, Lebanese sources are now offering a… pic.twitter.com/q2ehjdH96f

— Barong (@Barong369) June 22, 2026

Asked if the military would stay “for years” in Lebanon, Smotrich said, “Yes, and I say this as someone who is currently holding negotiations over the management of the defense budget for the next decade.”

He stressed that “until Hezbollah disarms, we aren’t moving a millimeter,” adding that Israel’s prime minister and war minister support this stance. 

Tyler Durden Tue, 06/23/2026 - 08:05

Futures Slide As Tech Tumbles, Korea Crashes

US equity futures are sharply lower as a Semis/South Korea-induced selloff has spread globally slamming tech stocks and pushing SpaceX 3% lower and below its first day of trading price of $150. Nasdaq stocks lead sentiment and early trading lower with AI cost concerns back in focus, as Bloomberg notes that traders are pointing to a South Korean media report we first highlighted at 8pm last night, saying SK Hynix is slowing expansion of AI memory chip production and shifting emphasis to commodity DRAM. As of 8:00am S&P futures were -1.3%, and Nasdaq futures tumbled 2.7%, both near session lows. In premarket trading, Intel and Micron led a broader decline among chipmakers while SpaceX fell 4.3%, below its $150 initial trade price. Chinese equities in Hong Kong entered a bear market. Mag7s are dragging the indices lower with MSFT / telecom the safety valve. In Seoul, chip giants SK Hynix Inc. and Samsung Electronics Co. slumped more than 10%. According to JPM, today's sell-off "may reflect anxiety into MU’s print on Weds as well as the levered ETF mkt structure." Bonds are operating as a safety haven as the yield curve bull steepens, and USD is bid. Commodities are seeing further declines in Energy as US / Iran discussions continue and precious metals are getting hit due to USD (gold) and AI / Tech (silver). Ags are mixed. Today’s macro data focus is on Flash PMIs, ADP’s weekly employment print, and regional Fed activity indicators. 

In premarket trading, chipmakers, memory stocks and other AI-related firms slide during the broader selloff. Decliners include Micron (MU -7%), Intel (INTC -6%), AMD (AMD -6%) and CoreWeave (CRWV -5%).

• Nvidia leads most of the Magnificent Seven group lower (Nvidia -2%, Tesla -2%, Meta -0.6%, Microsoft +1%, Apple -0.3%, Amazon -0.6%, Alphabet -2%,)
• Avis Budget (CAR) climbs 4% as the rental car company entered into a settlement agreement with Pentwater Capital Management and affiliated persons to resolve a lawsuit seeking recovery of short-swing profits, the company said in a filing.
• Best Buy (BBY) falls 3% after the company said Matt Bilunas will step down as CFO and depart the retailer at the end of July after 20 years, including seven years as CFO.
• Edgewell Personal Care (EPC) rises 9% after people familiar with the matter said the maker of Schick razors has rejected an unsolicited takeover offer from private equity firm Yellow Wood Partners.
• IBM (IBM) gains 4% as JPMorgan upgrades to overweight and as the company announced it has joined the OpenAI Daybreak Cyber Partner Program.
• Primoris Services (PRIM) sinks 35% after the infrastructure construction company cut its adjusted earnings guidance for the full year.

In other corporate news, Oracle reduced its workforce by 21,000 employees in the past 12 months, a wider scale than previously known, including those whose jobs were eliminated by the use of AI. SoftBank’s founder said there’s little merit to building data centers in space, while acknowledging that AI competition is intensifying. 

In an ugly session that started with a rout in South Korea, the Kospi finished down 10% while Nasdaq 100 contracts lose 2.5% and are struggling to find a floor. European stocks are not immune with the Stoxx 600 down 1%. Other assets have been caught up in the equity selloff with spot silver down over 4% and Bitcoin dropping 3%. Memory stocks, many of which are riding triple-digit gains this year, recorded some of the steepest losses. SpaceX was poised to fall below its first-day opening price of $150. 

In Seoul, chip giants SK Hynix Inc. and Samsung Electronics Co. slumped more than 10%. Intel Corp. and Micron Technology Inc. led a broader decline among chipmakers in US premarket trading, while SpaceX fell 4.3%. Chinese equities in Hong Kong entered a bear market. 

BofA equity derivative strategists said the Nasdaq 100’s heavy concentration in technology stocks has fueled its outperformance versus the S&P 500 in both returns and volatility. That’s pushed the Nasdaq’s Bubble Risk Indicator (BRI) closer to a key level which often signals elevated near-term tail risks. Meanwhile, already jittery tech sentiment and volatility could turn on a dime after Micron’s earnings tomorrow. The chipmaker has been the largest contributor to S&P 500 gains this year, while technology stocks make up each of the index’s 10 biggest drivers of returns.

“Some of the recent performance in stocks has been highly speculative, fueled by a passion from retail investors for short-term gains,” Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management, told Bloomberg TV. “We may not like it this morning, but actually it’s healthy behavior.

The market selloff “is largely a blip, but it is tapping a real and more fundamental anxiety,” said Amanda Lyons, head of research at Energy Group Capital. “The blip part: it is a single piece of local trade press, landing into a jumpy tape and a day before a nervous Micron print, on a trade that is about as crowded and as priced-for-perfection as anything in the market.

One regular buyer of stocks, the corporates themselves, are exiting for the time being. Goldman’s Vani Ranganath estimates approximately 65% of companies have entered their blackout window ahead of 2Q results.

For the AI trade, attention is now shifting to Micron’s quarterly results on Wednesday after the stock rallied more than 300% since January.

“The real test is Micron,” said Amanda Lyons, head of research at Energy Group Capital. “I would watch the rate of change in pricing and any change to capex or bit-supply guidance far more closely than the headline beat or miss.”

Fed’s Goolsbee said he remains concerned about inflation and questioned whether all the factors driving prices up are temporary. US Trade Representative Jamieson Greer kicked off talks with Indian officials this week as both sides stepped up efforts to resolve the remaining differences holding up an interim trade agreement.

In other assets, currency traders are on high alert for intervention after further weakness in the yen. Gold slides, with Deutsche Bank following Goldman in cutting price forecasts for the metal.

European equities fell sharply at the open on Tuesday: the Stoxx 600 falls 1.1% to 632.10, with mining and technology shares leading declines while health care and food beverage stocks are the biggest outperformers. Here are the biggest movers Tuesday:

• Porsche shares rise as much as 1.8%, erasing early declines after the German luxury carmaker confirmed its forecast for the 2026 financial year
• Basic resources stocks are falling the most in the Stoxx Europe 600, with the sector index down as much as 4.6%, as metals fell across the board on inflationary concerns and progress of peace talks
• Hermes shares fall as much as 2.9%, extending its drop to 11% over the past three sessions, after HSBC downgraded its rating on the Birkin bag maker to hold from buy
• Epiroc drops as much as 5.6%, the most in three months, as UBS downgrades the Swedish mining-equipment maker to sell from neutral and says its valuation “has gone too far”
• Signify plunges as much as 18% after the Dutch lighting manufacturer announced new medium-term targets and an updated dividend policy that analysts say would mean big cuts to shareholder payouts
• Telecom Plus shares plunge as much as 33%, sending shares to their lowest level since 2012. The company’s new five-year plan will see it invest with the ambition of improving growth and the quality of earning
• Dometic declines as much as 11%, the most since March, with Danske Bank cautioning its upcoming 2Q report will be held back by tough US markets for its RV and marine divisions

Earlier in the session, Asian stocks fell reversing the previous session’s gains as a selloff in technology shares weighed on regional markets. The MSCI Asia Pacific Index dropped as much as 3.6%, with SK Hynix and Samsung Electronics among the biggest drags. Most of the region’s major markets were in the red, led by declines in South Korea, Japan and China. A sub-gauge of information technology shares slid as much as 6.1%, after rallying 2.3% on Monday. South Korean stocks tumbled 10% from a record high as investors dumped chip heavyweights on concerns that the rally has become overstretched, prompting the local exchange to briefly halt program selling. Japanese equities slipped as some AI-related stocks fell following a selloff in US tech megacaps.

“I think our Asian markets are tracking a rotation already underway in the US rather than a fresh risk-off move,” said Billy Leung, an investment strategist at Global X Management. “Hyperscalers have been leading the pullback on AI capex concerns and negative cash flow concerns.”

In FX, the Bloomberg Dollar Spot Index gains 0.2% although the yen takes top place among the G-10 currencies, climbing a few pips against the greenback. The Aussie dollar is the weakest, falling 0.7%.

In rates, treasuries are richer across the curve with gains led by front-end and belly, as oil steadies and stock futures slump after a selloff in Korean chipmakers stoked concerns about the artificial intelligence trade. US yields richer by as much as 4bp across front-end and belly with 2s10s and 5s30s spreads steeper by 1bp and 3bp on the day; 10-year is around 4.48%, 3bp richer on the day with bunds and gilts in the sector outperforming by around 1bp: German and UK 10-year yields falling 3 basis points each. SpaceX shares fell to the lowest level since their first day of trading ahead of a potential jumbo investment-grade bond sale that could be announced Tuesday. Focal points of US session also include June preliminary PMIs and a 2-year note auction. This week’s Treasury auctions begin at 1pm New York time with $69 billion 2-year note sale, to be followed by 5- and 7-year notes Wednesday and Thursday; WI 2-year yield near 4.20% is ~13bp cheaper than the May auction, which stopped on the screws.

In commodities, Brent crude futures fall 1% to around $77 a barrel. Other assets have been caught up in the equity selloff with spot silver down over 4% and Bitcoin dropping 3%.

Today's US economic data calendar includes weekly ADP employment change (8:15am), June Philadelphia Fed non-manufacturing activity (8:30am), June preliminary S&P Global US manufacturing and services PMIs (9:45am) and Richmond Fed manufacturing and business conditions indexes (10am). Fed speaker slate empty for the session.

Market Snapshot

Top Overnight News

• Korea's KOSPI plummeted 9.99%, its steepest drop in more than three months, on Tuesday as overseas investors sold chipmakers following regulatory signals that the sector's rally had gotten overheated. RTRS
• South Korea’s retail investors are ploughing profits from a world-beating stock market into an overheated property sector, confounding government efforts to cool real estate demand. FT
• Iran said $12 billion of its frozen funds were set to be released as part of ongoing talks with the US, with the two sides broadly signaling progress in negotiations to formally end their war. BBG
• The Trump administration and Qatar have warned the EU that it faces a gas supply crunch that would force up prices unless Brussels rewrites planned rules on methane emissions. BBG
• The yen erased losses after Japanese Finance Minister Satsuki Katayama said she spoke with Scott Bessent and that they agreed that “bold action” may be needed. Traders are on high alert for intervention. BBG
• Euro-area business activity shrank less than anticipated in June. S&P Global’s Composite PMI rose to 49.5 from 48.5, topping estimates but remaining below the 50 mark that indicates growth. BBG
• The UK’s economy contracted for a second consecutive month, with its PMI slipping to a 14-month low. BBG
• The Fed’s Austan Goolsbee told American Public Media’s Marketplace he remains concerned about inflation and questioned whether price pressures will persist after temporary shocks have dissipated. BBG
• TSLA logged a more than twofold jump in European monthly sales in May as Elon Musk’s electric-vehicle maker continues to rebuild strength in a region where Chinese rivals are gaining ground. WSJ
• US Senate passes bipartisan affordable housing bill.

Iran War Latest 

• Iran's Foreign Ministry Spokesperson Baghaei said "if the other party does not fulfill its obligations, we should not be expected to unilaterally fulfill our obligations", Iran International reported.
• Iran's Foreign Ministry Spokesperson said defensive capabilities and missiles will never be a topic of discussion. US commitment regarding Lebanon is completely clear.
• Iran's Foreign Ministry Spokesperson said quadrilateral talks were stopped early in Switzerland due to the witnessing of US threats. Thereafter, exchanges were via a mediator, Mehr reported.
• Iran's Foreign Ministry Spokesperson said Iran has no plans to let IAEA inspectors visit nuclear sites targeted in the conflict.
• Iranian President, ahead of trip to Pakistan, said Iran is seeking the full implementation of the clauses that have been signed within the framework of international law, Nour News reported.
• Iranian Parliament Speaker Ghalibaf said the Strait of Hormuz will be administered by Iran according to international law.
• Iranian President Pezeshkian said in phone call to Turkish President Erdogan on Monday that Iran is ready to pursue diplomacy as per international law.
• Iran Central Bank Governor said Tehran is not obliged to purchase US agricultural goods under current agreements, and states that remaining frozen assets can be used to buy non-sanctioned goods beyond essential items, according to Tasnim.
• "Iranian Foreign Minister Abbas Araghchi will visit Baghdad next Sunday", Al Mayadeen reported citing sources; The meeting will include a briefing on the progress of the talks in Switzerland and the preparations.
• Iranian Foreign Ministry said "America has issued the necessary license for the sale of Iranian oil and petrochemical products", Al Jazeera reported.
• Iranian Ambassador to the UN said any further attacks on Lebanon would be a red line.
• Iranian Ambassador to the UN said Hormuz talks will be held with Oman.
• Iranian Ambassador to the UN said there has been good progress in negotiations with the US.
• "Sources indicate that the Iranian Foreign Minister [Araghchi] will hold separate talks with Pakistani officials", Al Hadath reported.
• Oman's Foreign Minister said Iranian negotiators reaffirmed their commitment to international law and to ensuring safe, toll-free passage through the Strait of Hormuz.
• Oman's Foreign Minister meets with Iranian Parliamentary Speaker Ghalibaf, with the officials discussing regional stability and Strait of Hormuz.
• Shipping data cited by Al-Arabia showed at least 20 ships have crossed the Strait of Hormuz in the past 24 hours.
• One person reportedly killed by Israeli gunfire in a southern Lebanese town, according to Lebanese Civil Defense and a security source - timing unclear.
• Senior US official tells Al Jazeera that talks between Lebanon and Israel will continue to advance comprehensive peace and a security agreement between the two countries.
• Israeli National Security Minister Ben-Gvir said Israel must act alone against Iran's nuclear program and must maintain military freedom in Lebanon, hopes withdrawal from southern Lebanon will not happen and will do everything to convince PM Netanyahu.
• Israel military shells and fires at Khan Yunis in Gaza, according to Fars News Agency.
• Israel's PM, Defence Minister and Military Chief said Israeli military will continue to act to neutralise threats to soldiers and citizens, demolish terrorist infrastructure, and maintain security zone in southern Lebanon, according to a joint statement. Israel's leadership reaffirms that the security of Israeli citizens and IDF troops will remain its overriding priority, with no room for compromise.
• Israeli forces reportedly violate Syrian territory, conducting house searches in southern outskirts of Quneitra governorate.
• US-Iran technical talks in Burgenstock had a "breakthrough", talks proceed seemingly in a positive direction, Journalist Mallick reported.
• US President Trump, on Israel and Lebanon, said "we'll take a look at it"; said he gets problems solved fast, including with Israeli PM Netanyahu.
• US President Trump said if Iran doesn't stick to agreement, he will do what he has to do. As long as Iran respects us, we are not going to have any trouble. Could restart the blockade quickly if needed.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were subdued with initial choppy price action following the mixed performance stateside, where participants reflected on the progress in US-Iran talks, but communication stocks and the Nasdaq Comp underperformed. KOSPI, -6.9%, led the sell off, moving to a test of 8.5k to the downside. ASX 200 traded little changed for most of the session amid a lack of major fresh catalysts overnight and as the strength in financials and defensives offset the losses in the tech and commodity-related sectors. Nikkei 225 swung between gains and losses with the index briefly climbing to a fresh record high before reversing course, and is on track to snap its 8-day win streak. Hang Seng and Shanghai Comp conformed to the lacklustre mood in the region and the absence of any major fresh catalysts, with the Hong Kong benchmark pressured by losses in miners, and digital platforms stocks amid a rotation out of hyperscalers into semiconductors.

Top Asian News

• China's MOFCOM announces measures to stimulate the auto after-sales market; to support the integration and upgrading of the car rental industry.
• Japanese Chief Cabinet Secretary Kihara said will take appropriate action against FX moves if needed.
• Canada awarded Australia a USD 1.75bln contract for its over-the-horizon radar system, boosting Arctic early warning capabilities, and which marks Australia's largest ever defence export.
• Japanese S&P Global Composite PMI Flash (Jun) 52.50.
• Japanese S&P Global Manufacturing PMI Flash (Jun) 54.9 vs. Exp. 54.5 (Prev. 54.5).
• Australian S&P Global Manufacturing PMI Flash (Jun) 51.2 (Prev. 50.7).
• Blackstone (BX) President and COO Gray told Nikkei that the firm plans to invest USD 30bln in Japanese data center development over the next three to five years.

Large losses in Kospi (-9.9%) crept through to Europe (STOXX 600 -1%) with EU tech leading the losses. No specific headline driver for overnight losses in a typical non-conflict risk-off move (stocks/oil down, fixed/havens bid). As you would expect, South Korean heavyweights Samsung and SK Hynix (which account for over 50% of the index) led the declines, both falling 12%. Some analysts point out the mechanical rebalancing from leveraged ETFs exacerbated losses with a large share of the vehicle used to gain Kospi exposure coming as leveraged ETFs. Others point out positioning into Micron earnings due after the close on Wednesday. Given the above, Tech is the worst sectoral performer (bar Basic Resources), the sector posting losses in excess of 3%. The highest weighted chip constituents ASML -5% (Highest weighted in Europe+Tech Sector), Prosus -2.1% and STMicroelectronics -7.3%. For Basic resources, the sector has been dragged lower by declines in metals (Gold -2.5%, Silver -5.5%).

Top European News

• German Chancellor Merz outlines his support for a capital-based pension system, saying it "strengthens the system".
• German Chancellor Merz confirms plan to push forward with all pension reform proposals.
• Britain’s biggest business lobby group, CBI, said UK firms are not seeking another Brexit referendum and have little interest in rejoining a customs union with the EU, according to FT.
• UK's Burnham will seek to soothe markets as he marches on number 10 and will use a speech next week to pledge to grow the economy and commit to Labour's fiscal rules, according to The Times. Burnham is considering Miliband, Streeting and Mahmood for Chancellor.

FX

• G10s are entirely lower against the Buck (bar JPY), as USD attracts haven demand in a textbook risk-off market move (stocks/oil down, fixed/havens bid), signalling the market is gradually moving away from geopolitical trade. As you would expect, Antipodeans underperforms, Aussie fares the worst as metals suffer from the strong Buck, while JPY is the only currency stronger vs the USD after a sharp 30pip move lower as it sits towards 2024 highs.
• DXY firmer by 0.2% as it attracts haven demand amid tech weakness in Kospi/NQ (see equities at 09:25 BST for analysis). In terms of domestic newsflow, Fed's Goolsbee said services inflation was “a little disturbing”. The data docket is light but begins to pick up today (ADP weekly + PMIs due) heading into Thursday's GDP revisions and PCE data. DXY surpassed Friday’s high of 101.12, now looks to the May peak just below 102.
• JPY continues to whipsaw around multi-year lows against the Buck, with USD/JPY towards 161.50-162. Japanese officials continue attempts to bolster the Yen, but continue unsuccessful with the Greenback bid. Overnight, Japanese Finance Minister Katayama confirmed she spoke with US Treasury Secretary Bessent on Monday. Elsewhere, APAC trade saw stronger flash PMI data and mixed results of the latest 5yr JGB auction.
• GBP is weaker and tracks the firmer Buck with participants awaiting further updates from a likely incoming Burnham premiership. Despite Gilts continuing to outperform peers on optimistic Burnham reporting (Streeting added to Chancellor candidates/Burnham said to announce commitment to Fiscal rules), Miliband still in the picture for Chancellor is viewed by Sterling traders as an unwelcome option. As such, GBP awaits further press reporting and tracks the Buck with Cable remaining at 1.32, EUR/GBP unchanged. ING this morning writes “Regardless of politics, we keep favouring higher EUR/GBP on the back of a dovish view (no hikes) on the Bank of England”. EZ/UK PMIs were mixed (see fixed income for analysis), EUR saw fleeting strength on the French figure, which indicated a cooling of cost pressures; a move which proved fleeting as the German services and composite metric cooled (Some respondents' answers did not eclipse the signing of the US-Iran MoU).

Fixed Income

• A firmer start for fixed income as the complex benefits from the softer energy environment, though the influence of this has diminished amid recent updates from Iran, and the weak risk tone as the KOSPI closed lower by 9.9% and has weighed on European price action, with the European Tech sector lower by over 3%.
• USTs firmer by seven ticks in 109-06+ to 109-14+ confines, towards but just off highs as the mentioned energy move off lows has seemingly formed a ceiling in fixed or now at least. Ahead, we have the region’s Flash PMIs before 2yr supply. A tap that should benefit from a number of factors.
• Bunds firmer by just over 10 ticks and are just under that from the 126.74 high. Initially moving on the above, in-line with peers and with no real reaction to the latest pension reform commentary.
• The main updates, aside from the APAC moves, today have been Flash PMIs for June. Firstly, France’s figures sparked some modest EGB pressure as the components all came in firmer than expected. Internal commentary pointed to a possible peak in price pressures. Thereafter, Germany was below consensus but caveated by the majority of responses coming in before the MoU signing. Nonetheless, encouragingly, the series showed that inflationary pressures had started to ease off.
• Finally, the EZ figure was mixed and again most responses came before the MoU. But, it already showed that lower energy prices were filtering through to businesses with inputs cost rates and selling price inflation moving lower in June. Again, pointing to a potential price spike peak.
• Overall, the data chimes with those who believe that expectations for further ECB tightening are overdone. A point arguably added to by the pertinent commentary from President Lagarde on Monday. As such, upcoming hard and survey data will be scoured for confirmation that prices may have peaked which, alongside the stagnation in activity, may well see a dovish repricing in the period ahead.
• Gilts echoed the above, higher by 35 ticks at best and to a new WTD high of 89.19. Today’s strength also comes from reporting that Burnham will next week give a speech outlining his commitment to the fiscal rules; however, The Times briefing notes that Miliband remains in consideration to be Chancellor, a point that potentially caps any further upside.
• PMIs for the region were weak, though price commentary was also welcome and chimes with the view that the BoE is on hold for the foreseeable.
• The Netherlands sold EUR 1.98bln vs exp. EUR 1.5-2bln 3.50% 2056 DSL Bond: avg. yield 3.52% (prev. 3.51%).
• Japan sold JPY 1.9tln 5yr JGBs; b/c 3.11x (prev. 3.22x), average yield 1.905% (prev. 2.024%).
• Germany sells EUR 3.807bln vs exp. EUR 5bln 2.50% 2028 Schatz: b/c 1.90x (prev. 1.58x), average yield 2.57% (prev. 2.59%), retention 23.86% (prev. 22.80%)

Commodities

• Geopolitical newsflow remains focused on the US-Iran talks, and the sometimes mixed commentary filtering out from the respective officials. As it stands, there does not appear to be any cause for concern, with President Trump and VP Vance both sounding positive about the initial talks; the Iranian side also said good progress has been made. However, looking between the lines reveals some contradictory remarks. On Monday, VP Vance said that Iran would allow the IAEA to inspect nuclear facilities. However, Iran’s Foreign Ministry Spokesperson stated that there are no plans to let inspectors visit nuclear sites targeted in the conflict; the nuance of “sites targeted in the conflict”, potentially offers some hints to the inner workings of the proceedings between the US and Iran. Do note that the Iranian President is visiting Pakistan today.
• The biggest risk to the talks is Israeli actions in Lebanon. Several high-ranking Israeli officials have suggested that Israel will continue its military operations in Lebanon. Comments which come ahead of the US-mediated Lebanon-Israel talks, which are set to begin today. A confab which spans over a couple of days, and focuses on finalising “pilot zones” within southern Lebanon and long-lasting peace.
• Crude benchmarks traded sideways for much of the APAC session, before then moving to lows heading into the European cash open. Since, WTI and Brent have bounced a touch off lows, to currently trade towards the mid-point of the days range. In more detail, WTI Aug’26 (-0.5%) sits within a USD 72.48-74.45/bbl range and Brent Aug’26 (-0.6%) holds within a 76.43-78.23/bbl range.
• Spot gold (-2%) extends lower amidst the continued hawkish mood in markets, which have kept the USD elevated. For gold specifically, a number of sell-side banks have cut their price forecasts for spot gold. On Monday, Goldman Sachs cut their year-end target to USD 4,900/oz (prev. USD 5,200/oz). Its model focused on the Fed, whereby every 50bps worth of easing adds c. USD 120/oz of support to spot gold. Most recently, Deutsche Bank cut its gold forecast by 22%. Today, the yellow metal holds at the bottom end of a USD 4,091 to 4,198/oz range; it may find support at a recent low of USD 4,023/oz, if the pressure continues.
• Base metals follow the downbeat risk tone seen across broader markets. 3M LME copper is lower by c. 1.8% and holds within a USD 13,396.35-13,671/t range.
• Rabobank lowers its Q3 Brent price forecast to USD 79/bbl (from USD 103/bbl), and Q4 to USD 78/bbl (from USD 93/bbl); sees Brent averaging USD 74.50/bbl in 2027, and USD 71/bbl in 2028.
• US Department of Agriculture reported a new case of screwworm in a Texas goat, taking total number of domestic detections to 16 cases.

Central Banks

• Fed's Goolsbee (2027 voter) said inflation is well above target and going the wrong way, adds need evidence this inflation is temporary and services inflation is a little disturbing. said:. We haven't had stagflation shock, and the job market has been stable. Fed Chair Warsh's approach is let's have less speculation about rates, less forward guidance, while Goolsbee said he is pretty sympathetic to that approach.
• ECB's Kazimir said they are data-dependent, but the direction for policy is clear.
• ECB's Lane said that inflation risks being above 2% for some time; increase in energy prices is expected to keep inflation well above target into H1'27. Remains attentive to both sides of the outlook. Energy shock is feeding through to broader inflation. labour market resilience, solid household balance sheets and public investment should support activity.
• ECB's Escriva said service-sector inflation is showing very strong persistence.

Geopolitics

• Russia and Ukraine may swap Prisoners of War soon, TASS reported.
• Ukraine's capital Kyiv issues an air raid alerts and authorities ask people to seek shelter.
• North Korea leader Kim Jong-un said North Korea will further assert its status and role as a nuclear power, adds will accelerate broader plans, enhance nuclear arms technology and develop water deterrence capabilities. accused US and South Korea carrying out the most dangerous provocations through nuclear war machinery. To accelerate building of 10,000-ton strategic guided missile cruiser.
• China's Beihai Maritime Safety Administration announced that parts of the Beibu Gulf will be closed to navigation due to military training from 11:00-12:00 Beijing time on June 23rd.

US Event Calendar

• 9:45 am: Jun P S&P Global US Manufacturing PMI, est. 54.6, prior 55.1
• 9:45 am: Jun P S&P Global US Services PMI, est. 51.1, prior 50.7
• 9:45 am: Jun P S&P Global US Composite PMI, est. 52.1, prior 51.5
• 10:00 am: Jun Richmond Fed Manufact. Index, est. 8, prior 13

DB's Jim Reid concludes the overnight wrap

When I started in financial markets in 1995, Alan Greenspan was a towering presence and arguably the first Fed Chair to become a global rockstar. At that point, he was eight years into what would become a 19-year tenure as Chair of the Federal Reserve. However, my own memories pale in comparison to those of my colleague Peter Hooper. Peter joined the Fed in 1973, later moving to DB in 1999, and worked closely with Greenspan for over 50 years.

Peter has written a thoughtful remembrance following Greenspan’s passing yesterday at the age of 100. Drawing on first-hand experience as a colleague at the Federal Reserve and later recruiting him to be an adviser at Deutsche Bank, Peter highlights Greenspan’s intense curiosity, instinct for data and markets, and ability to identify structural shifts such as the 1990s productivity boom. In many ways, Greenspan was ahead of the data—something Kevin Warsh is attempting to emulate today—so there are clear parallels between the eras. It is a personal and insightful tribute from someone who had a ringside seat throughout Greenspan’s remarkable career, and it is well worth reading in full on the DB Research Institute site.

Moving onto the remembering another landmark in history, 10 years ago today, those of us on this island marched to the polls to decide whether we wanted to stay in the EU or not. Ironically, I had a long weekend planned in the French Alps and left for the airport immediately after voting and arrived to a fierce thunderstorm in the mountains and news that the UK had voted to leave. It all felt fairly biblical and instead of enjoying a break I spent all night and the next 3 days glued to my work laptop.

To mark the anniversary Sanjay and Shreyas have published a piece entitled "Brexit 10 years on: What's worked, what hasn't, what's next?" See it here ahead of our first in-person Deutsche Bank Research Institute event on Thursday reviewing the topic and all things UK related given the huge events of recent days. We may still be able to squeeze you in.

The irony around the anniversary is that the shadow of Brexit partly claimed another UK Prime Minister yesterday with Keir Starmer resigning and heralding in what will be the 7th Prime Minister in that subsequent decade. The only viable candidate now seems to be Andy Burnham, who won last week’s by-election in Makerfield, after rival challenger Wes Streeting endorsed him yesterday to be leader. So, although nominations for the Labour leadership are set to open on July 9, currently it looks highly likely that Andy Burnham is the only candidate who would get more than 20% of MPs backing him to stand, meaning that a formal contest would be avoided. That’s reminiscent of when Labour last changed leaders in government back in 2007, when Chancellor Gordon Brown took over from Tony Blair without a contest. Under this timetable, Burnham could become the PM as soon as mid-July.

Against this backdrop, UK assets responded relatively positively, as it looks like a period of extended uncertainty and a potential summer leadership contest have been removed. Speculation that Streeting may get the job of Chancellor was seen as a positive as well given his more moderate tendencies.  The pound sterling was the strongest performing G10 currency on the day, up +0.14% against the US Dollar, whilst yields on 2yr (-4.5bps) and 10yr (-3.4bps) gilts moved in line with their European counterparts inspite of the political upheaval. Moreover, the FTSE 100 was up +0.72%, again similar to the STOXX 600’s +0.58% advance.

Another G7 country in the news is Japan and this morning the currency is fairly flat after seeing a strong spike yesterday afternoon London time after it got within a whisker of hitting 40-year lows. It hit 161.93 versus a low of 161.96 in July 2024. Beyond that you have to go back to December 1986 to see weaker levels. There was speculation over imminent BoJ intervention with JNN reporting an online emergency meeting between Finance Minster Katayama and US Treasury Secretary Bessent yesterday. This meeting has been confirmed by Katayama this morning, who stated that the US and Japan are aligned on FX policy. This morning it's hovering remarkably quietly at 161.60 given all the noise.

Less quiet are Asian equities which are falling on tech weakness. The KOSPI (-6.41%) is leading the declines, followed by the Nikkei (-1.66%), Hang Seng (-1.16%), Shanghai Composite (-0.37%) and S&P/ASX 200 (-0.26%). S&P 500 (-0.66%) and NASDAQ 100 (-1.19%) futures are also weak with the tech sell-off dominating.  

Early morning data showed that Japan's private sector activity expanded at its fastest pace in three months in June, driven by strong manufacturing output and a return to growth in the services sector, although firms faced the sharpest rise in input costs in nearly four years. The S&P Global flash Japan manufacturing PMI rose to 54.9 in June while the services PMI climbed to 51.8 from 50.0, indicating a renewed expansion in business activity after stagnating in May. As a result, the flash composite PMI, advanced to 52.5 from 51.1, marking the strongest pace of overall private-sector growth since March.

This all follows mixed markets yesterday, as tech worries overpowered investor optimism about progress in the US-Iran negotiations over the weekend. So that meant the S&P 500 slipped -0.37%, with the Nasdaq (-1.32%) and Magnificent 7 (-2.17%) posting even steeper losses, dragged down by declines by Alphabet (-4.99%) and Amazon (-4.75%).

Those equity losses were compounded by the latest rise in Treasury yields yesterday, as investors continued to price in a more hawkish Fed. Indeed, yesterday saw markets price in a 98% chance of a rate hike by the September meeting (up from 93% on Friday), and the 2yr yield (+4.8bps) closed at a 16-month high of 4.23%. Meanwhile, the 10yr yield was up +5.5bps to 4.51%, and significantly, the 10yr real yield (+8.0bps) hit a one-year high of 2.26%. That rise in real yields was something Henry looked at in a note yesterday (link here), exploring why markets haven’t rallied as much as might have been expected given the US-Iran deal and the slump in oil prices in the last two weeks.

Speaking of the Iran war, there were fresh signs of progress in the negotiations, with Vice President JD Vance saying that the weekend talks were “very, very good”. That follows comments from the Iranian side, who had previously said in the small hours of Monday that there’d been major progress to end the war in Lebanon. Moreover, the US issued a 60-day sanctions waiver to allow Iran to sell its oil on the international market, which was seen as one of Tehran’s demands for implementing last week’s interim deal. So that backdrop saw oil prices come down, with Brent crude (-3.31%) closing at a 3-month low of $77.90/bbl, whilst WTI (-2.32%) also fell to $74.82/bbl.

Turning back to Europe, ahead of this morning's flash PMIs, ECB President Lagarde said yesterday that she saw no more need for the ECB to have a “forceful response” to the Iran War. In comments to lawmakers, Lagarde said she saw inflation returning to target over the medium term, saying that the ECB saw “no evidence yet of de-anchoring of inflation expectations or second-round effects” that warrants a “more forceful policy response at this stage.” This contrasted with some of the more hawkish messaging from the ECB last week, which saw markets dial up their conviction of further tightening this year.

Those comments supported a rally in European government bonds, with yields on 10yr bunds (-3.4bps), OATs (-3.4bps) and BTPs (-4.3bps) all coming down. And there were larger declines at the front-end, with the 2yr German yield down -4.4bps as investors dialled back the likelihood of aggressive ECB rate cuts this year. Indeed, markets were pricing 32bps of ECB hikes by the December meeting at the close, down -4.5bps on the previous day. Otherwise, equities also rose, with the STOXX 600 (+0.58%) making a fresh gain, while the DAX (+0.62%) also rose. The CAC (-0.25%) struggled again and has been struggling this year largely due to its outsized luxury stocks weighting.  

To the day ahead now, we’ll get June flash PMIs for the US, UK, Eurozone, Germany, and France. We'll also see US June Philadelphia Fed non-manufacturing activity, Richmond Fed manufacturing index, business conditions, France June business confidence and May retail sales. Earnings include FedEx and Carnival.

Tyler Durden Tue, 06/23/2026 - 07:59

Sheer Madness: UK Tests Long-Range Missile For Ukraine To Bomb Moscow

Ukraine is making it clear they are seeking to "bring the war to Russia" - and this is what's behind the recent series of massive Ukrainian drone strikes on Moscow, which has wreaked havoc particularly on energy refineries, and air travel for the region. That Ukraine desperately wants to gain back what leverage they are able to is fully understandable, however, that NATO is backing such actions against a nuclear-armed superpower constitutes madness. 

Aside from covert targeting assistance, the UK is taking things in a more overt direction, having reportedly just tested missiles with a range of 300 miles which is intended to be sent to Ukraine's military. 

Illustrative file image

The British missile platform has the capability of delivering 500-pound warhead to Moscow.

The Telegraph offers some further details regarding context to the major Ukraine support program in the following:

The Ministry of Defence (MoD) challenged firms to build long-range strike weapons that can fly at more than 370mph, cost about £400,000 each and can be built at a pace of 20 a month.

Some 27 bids from industry were made with Dragon’s Den-style pitches held last February, before six UK companies were awarded contracts worth around £5m each to design prototypes for testing in just seven months.

By last December, only three suppliers remained: MBDA UK, which makes the Storm Shadow stealth missile, MGI Engineering, a UK small or medium-sized enterprise (SME) with a background in Formula 1 technology, and Rotron Aerospace, another UK SME with a history of working with the MoD.

And the publication confirms that "New systems that can attack targets more than 300 miles away have been tested at a range in the Hebrides, with further trials taking place in the UK over the coming months."

For missiles of this range and power, this is a relatively cheap price tag, and can apparently be rapid-produced at that.

UK Armed Forces Minister Louise Sandher-Jones has said the new missiles are intended to "complement" the Storm Shadow cruise missiles London sends to Ukraine.

"The UK stands shoulder-to-shoulder with Ukraine, and we will continue to provide the support it needs to defend itself against Russian aggression," she stated. "Project Brakestop shows what happens when we combine that commitment with the talent and ingenuity of British industry."

Ukraine has in tandem all along been advancing its domestic-developed long-range drones:

The open and brazen admission that these future systems could soon be use to directly target the Russian capital would be an insane escalation by NATO. Once NATO and Western systems begin blowing up buildings in Moscow, suddenly direct Russian military retaliatory action against Europe gets much closer to becoming a reality. Again, this is sheer madness and lunacy by some of Europe's most hawkish leaders.

Tyler Durden Tue, 06/23/2026 - 07:45

"But A Whimper": Retail Euphoria In SpaceX Fizzles After Stock Loses $600 Billion In One Day

It started off with a bang: SpaceX IPOed on June 12 with an opening price of $150 on their first day of trade, well above the offering price of $135, and within two days, enterprising traders were ravenously bidding up 380 calls (expiring in just days) in hopes of sending the stock soaring in hopes of orchestrating a gamma squeeze. 

They are going for it https://t.co/tT4cJns9nv pic.twitter.com/P6NTzq4tx2

— zerohedge (@zerohedge) June 16, 2026

In a note out this morning, Canaccord described the "new level of optimism" that accompanied the SpaceX IPO as follows:

SPCX dynamics indicate new level of frenzy: prior to this historic IPO, we felt AI optimism was robust and certainly at times overdone, but largely funded by rational (if not exuberant) institutions including large, well capitalized public companies and PE investors. In our view, SPCX has marked a new chapter in this saga, ushering in a greater level of retail involvement and driving the stock into the top 6 market cap companies in the world, and in its first week of trading, adding the equivalent of ~1/2 the value of META, with a market value much greater than sister company TSLA despite generating only ~20% of its revenue base. Despite the company name, revenues are skewed towards connectivity (Starlink contributing $11.39 billion), with launch services generating only $4.1 billion (AI compute was $3.2 billion in 2025).

Vanda Track was even more effusive, and in a retrospective published earlier on Monday wrote that "SpaceX's first week of trading was one for the record books. Retail investors bought a net $405mn of SPCX during its first 5 trading sessions, comfortably the strongest retail IPO debut in recent history. Retail buying was extreme during the first few sessions before moderating later in the week. The flow profile increasingly resembles a retail investor that is building long-term positions rather than chasing a short-term meme stock."

The scale of retail buying in SPCX last week becomes even more remarkable when put into context. Retail investors bought more SPCX last week than they bought across all other Mag 7 stocks combined (total activity of the last 5 days in NVDA, MSFT, AMZN, META, GOOGL and GOOG was $278mn combined). They also bought more SpaceX than the combined retail buying of SPY & QQQ over the past week ($352mn). For a stock that only started trading last week, SpaceX is already competing with the market's biggest stocks and ETFs for retail capital.

As has become the norm, while buying of the stock was off the charts, retail investors quickly congregated to various leveraged SpaceX products, which also attracted strong demand. Retail investors bought $65.8mn of the Leverage Shares 2x Long SPCX Daily ETF during its first few trading sessions (while a sizeable number, but it remains well below the type of activity normally seen during speculative retail frenzies). It still dwarfs recent thematic launches – the Roundhill Memory ETF DRAM attracted just $5.6mn during its first four trading days, and it took 22 sessions for cumulative retail buying in DRAM to exceed the amount already allocated to the leveraged SpaceX ETF.

Yet after bursting out of the gate, momentum has fizzled and hopes that the stock would gamma squeeze into orbit (on a reusable rocket, of course), quickly faded. The result: after peaking on June 16 - the day SPCX stock hit a record $225 and briefly topped Microsoft in market cap - daily retail flows have collapsed, and the retail turnover has become virtually nonexistent. 

This brings us back to what Canaccord said: while the bank concluded that based on the early performance of SpaceX, "Tech can likely keep its momentum in the short term", it warned that "a new, more dangerous layer of air is now underneath these stocks."

Sure enough, with the momentum gone, and the realization that trillions of shares are about to be unlocked, the stock has slumped for 3 straight days, culminating with Monday's plunge when, with SpaceX rushing to take advantage of the bond market euphoria to sell over $20 billion in investment-grade bonds for the first time before the bond window shuts in order to refinance an existing bridge loan with much higher interest, SPCX shares plunged 16.4%, shedding a record $600 billion in market value, and following a 5% drop on Wednesday and a 3.5% slide on Thursday, the stock is now just barely above where it broke for trading at $150 two weeks ago. 

Worse, the stock tagged its post-IPO opening price of $150 after hours, and should the stock open below that tomorrow, then everyone who bought in the open market (and held) will be underwater.

What is especially notable, or perhaps expected, is that the pump and dump is taking place with only 5% of SPCX float available for trading: 95% of the stock is still locked-up for trading. But that will change soon:

22V Research strategist Jeff Jacobson said that there is a 20% insider share unlock after Space's earnings announcement in early to mid-August. In addition, there is a 10% share unlock if the stock trades 30% above the IPO price, as well as 7% share unlocks set for around Aug. 21 and then again on Sept. 10.

Jacobson said insiders could potentially sell 44% of SpaceX shares by early September, increasing the current float by about 900%.

In other words, it's only going to get more difficult to lift the stock from here, and meanwhile, Michael O’Rourke, chief market strategist at JonesTrading said that “sellers are back in control,” adding that “anyone in the world who wanted to buy this has bought it already.”

In its take on today's move, Bloomberg wrote that today's drop in SpaceX "managed to bring much of the market down with it." 

We don't know if that's indeed the case yet, but in this market - which has been driven almost entirely by retail euphoria and momentum chasing from the March lows - should retail indeed get cold feet, first to SpaceX, then to the Memory bubble, and finally to Semi stocks which have become the main beneficiaries of the AI trade...

Divergence between Hyperscalers and Semis becoming untenable: massive capex spending is the key variable. pic.twitter.com/ifrtT9LJnR

— zerohedge (@zerohedge) June 22, 2026

... then it will be time to invert TS Eliot, as the selling whimper becomes a bang. 

Tyler Durden Tue, 06/23/2026 - 07:35

Half Of Crimea Goes Dark After Ukrainian Strike Hits Thermal Power Plant

Yet more drone attacks sent by Ukraine's military has crippled much of the infrastructure of the Crimean peninsula. Reuters is confirming significant power outages, while some regional reports say as much as half of all Crimea is without power Tuesday.

One of the regional publications specified that "Yevpatoria, Saki, Krasnoperekopsk, Dzhankoy, and surrounding areas were left without electricity, reports the Ukrainian service of Radio Svoboda."

"Preliminary, electricity supply is planned to be restored within 24 hours" - after several facilities in Crimea suffered direct hits by inbound drones. Fires have been witnessed at at railway and military facilities. Importantly, a large fire is being reported at a thermal power plant in Kerch, which left the greatest impact in terms of the widespread regional blackout:

A strike on a power plant caused major power outages across Crimea, leaving about half the peninsula without electricity. pic.twitter.com/2yfCvAvhFv

— Clash Report (@clashreport) June 23, 2026

Telegram channel "Crimean Wind" has written, "The CHP plant fire in Kerch is confirmed; the fire spread to a reservoir. The monitoring group, relying on satellite imagery, records a smoke plume about 47 kilometers long."

According to more: "A strike on an oil depot, a TPP-Terminal, port infrastructure, and facilities in the area of Henichesk and the Arabat Spit is also reported."

It was only two days ago, on June 21, that an oil depot in the Crimean city of Kerch was attacked, it is reportedly still burning, with reports of fires at the sprawling terminal complex's Kavkaz port.

Life for millions in Crimea is already seriously strained, after those prior Sunday attacks resulted in the most severe fuel restrictions imposed on the population since the war began over four years ago.

Crimean Governor Sergey Aksyonov had previously confirmed the fuel crisis for the whole region, saying, "Today, June 21, starting from 09:00 am, fuel sales at Crimean petrol stations have been suspended" - though he added that fuel would only be sold to state enterprises.

He made clear in a Telegram post that starting Sunday morning local time gas stations across the peninsula would stop selling fuel to individuals and businesses. All cash, card and fuel coupons were immediately halted.

Relentless, nightly drone attacks making life harder on common Russians - in tandem to the Ukrainian population also having suffered immensely under Russia's bombs and drones...

Overnight, the Ukrainian Armed Forces launched yet another large-scale drone attack against Russian-occupied Crimea, targeting military sites and energy infrastructure near the Kerch Strait. pic.twitter.com/7ddIVmjkAz

— OSINTdefender (@sentdefender) June 23, 2026

Ukraine's President Zelensky boasted of the weekend attacks, stating on social media that "Facilities on both sides of the Crimean Bridge were hit: maritime logistics used to transport oil in the Krasnodar region and an oil depot in temporarily occupied Kerch."

BBC had separately earlier reported that Kiev "hit a logistics facility for oil transportation in Russia's Krasnodar region, which lies adjacent to Crimea across the Kerch Strait. Local authorities said one person had been killed on a passenger ferry."

Tyler Durden Tue, 06/23/2026 - 06:55

Worst Ad Campaign Ever...

Authored by Steve Watson via Modernity News,

There's having no discernment, and then there's this...

A three-year-old boy remains in critical but stable condition at Addenbrooke's Hospital after being thrown into a crocodile enclosure at a Cambridgeshire zoo. His alleged attacker, a 30-year-old man from Norfolk with reported learning difficulties, was quickly released on bail with his identity withheld from the public, sparking backlash. In the middle of this horror, discount retailer Wowcher blasted out an email urging customers to "Snap up these deals quicker than a croc can catch a kid."

Yes, really.

What the actual f @wowcher? pic.twitter.com/v7B83k8sch

— Paul O'Brien (@PaulOBrien) June 20, 2026

The tone-deaf marketing stunt has triggered widespread revulsion, forcing the company into a grovelling "unreserved" apology while exposing yet another layer of institutional detachment from real human suffering.

The attack unfolded on a Thursday afternoon at the family-run Johnsons of Old Hurst zoo near Huntingdon. The boy, who was not known to the suspect, suffered serious injuries including a broken arm, a broken pelvis likely caused by the impact of being thrown, and multiple crocodile bites.

Zoo staff pulled him from the enclosure and administered immediate treatment at the scene. In a moment of extraordinary bravery, Tracey Johnson, wife of zoo owner Andy Johnson, jumped into the crocodile pit to help rescue the child.

Cambridgeshire Police arrested the 30-year-old man on suspicion of attempted murder. He was assessed as unfit for interview and has since been released on bail until 18 September. His identity remains hidden.

The decision to release the suspect on bail while concealing his identity has fuelled intense public anger. Many see it as further evidence of a justice system that prioritises processes and sensitivities over the basic protection of children and the public.

Some media outlets also softened the deliberate nature of the attack by reporting that the boy had "ended up" in the crocodile enclosure rather than stating he was thrown.

Screenshots of the Wowcher email spread rapidly. Fury erupted on social media and community forums. The Norwich Norfolk UK Community Notice Board posted: "Why do wowcher think its ok to use this as a heading on their emails??"

Wowcher apologises 'unreservedly' for email appearing to mock crocodile attack on young boyhttps://t.co/Sd1uguKddI

— GB News (@GBNEWS) June 21, 2026

Customers expressed immediate disgust. One described themselves as "now unsubscribed." Another called the email "disgusting" and added "if that's real someone needs to be fired." A third said they had emailed the company with no reply and would "not be using them again for sure, even if its a poor effort at a joke somehow."

A marketing professional who encountered the email on LinkedIn described it as "tone deaf, clueless, moronic, irresponsible, sick" and expressed disbelief that it had cleared multiple layers of approval. He told the Wowcher marketing team to "take a good, hard look at yourselves" and warned that not every trending moment should be jumped on for reactive marketing.

saw this on linkedin and cannot quite believe this has been approved.

a little boy was seriously injured by a crocodile at cambridgeshire zoo — one man arrested on suspicion of attempted murder.

and @wowcher think this is a brilliant opportunity for reactive marketing.

tone... pic.twitter.com/K9UGtCsb16

— James | open to work arc (@bl0ckjames) June 21, 2026

Wowcher moved swiftly to contain the damage. A spokesman issued the following statement: "We are extremely sorry for an email subject line sent by Wowcher yesterday. The wording was unacceptable. It should never have been written. It was never approved for use. The responsibility sits with us and we are urgently reviewing how our processes failed. We recognise the hurt and distress it has caused, particularly for the young child's family at this unimaginably difficult time."

The spokesman continued: "We are reviewing all scheduled marketing content while we urgently strengthen our creative, approval and sign-off safeguards. There is no excuse for this. We apologise unreservedly and will take the necessary steps to make sure this does not happen again."

The company's insistence that the email "was never approved for use" has been widely interpreted as an attempt to shift blame onto an individual rather than accept full institutional responsibility for the failure of basic safeguards.

This episode reveals something deeper than one bad subject line. It shows how insulated people have become. They operate in environments where real events - especially tragedies involving children - are treated as abstract content or "trending moments" rather than visceral realities that demand basic human restraint.

A child fighting for his life after being thrown to crocodiles becomes raw material for a flippant pun about deals. The suffering is unreal to them, something happening to other people in another sphere they can comment on or monetise without consequence.

It reflects a wider modernity that strips away moral grounding and discernment. When everything is content, empathy atrophies. People in these bubbles no longer instinctively recoil from turning horror into marketing copy because the horror never feels fully real to them.

They have no skin in the game, no direct encounter with the raw aftermath that families and communities actually endure. The result is not just bad taste but a gradual hollowing out of the shared humanity that once made such behaviour unthinkable.

The same pattern appears elsewhere: institutions that release individuals accused of extreme violence with minimal transparency, media that softens language around attacks on children, and corporations that later issue polished apologies while claiming the offending material "was never approved."

All of it stems from the same root - a culture that has grown comfortable treating real human pain as distant, manageable, and ultimately secondary to process, narrative, or engagement.

A society that loses the capacity to recognise horror when it stares it in the face - whether in a justice decision, a media report, or even a marketing email - has already surrendered something essential.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Tue, 06/23/2026 - 06:30

Piper Sandler's Top Economist Sees "Big Bounce" In Consumer Sentiment As Gas Prices Tumble

Building on last week's theme of "early signs of a turn in U.S. consumer discretionary," Piper Sandler analysts note that the sharp decline in gasoline prices at the pump is beginning to lift consumer sentiment, particularly among lower-income households. Their proprietary daily confidence data suggest the rebound is still in the early innings, but the direction is clear: cheaper gas is easing pressure on working-class folks.

Piper Sandler's chief global economist and head of the firm's economics research team, Nancy Lazar, provided clients with three of the most important consumer conclusions of the week as the national average for gas at the pump tumbled due to easing tensions in the Middle East:

1. The steep rollover in gasoline prices triggered a big bounce in PSC’s Daily Confidence Survey last week, with low-end consumers particularly more cheerful.

2. With all daily survey components improving, the observed retail sales aggregate has hooked up.

3. Higher prices weighed on consumers last quarter, according to Kroger & La-ZBoy.

Lazar's note, titled "The Gasoline Down-Confidence Up Two-Step," says that cheaper pump prices are now producing consumer tailwinds amid a still-healthy labor market.

She shows that Piper Sandler's proprietary high-frequency gauge of U.S. consumer sentiment, conducted by Rasmussen Reports, "appears to have bottomed, mirroring the sharp rollover in gasoline prices – adding to economic tailwinds from refunds and healthy labor."

"The impact of easing pump prices is clear in both confidence and consumption," Lazar continued in the note.

In markets, she pointed out, "The Russell 2000 and XRT retailing ETF certainly act as if the bottom is in for confidence."

More consumer sentiment data from Piper's internal sources show improvement:

The rebound in sentiment could help drive consumers back into retail stores and support spending on experiences...

Great news for the Trump administration, with 136 days until the midterm elections this fall. 

Professional subscribers can read more consumer notes at our new Marketdesk.ai portal.

Tyler Durden Tue, 06/23/2026 - 05:45

These Are The Countries Where $1,000 Takes The Longest To Earn

How long would you need to work to earn $1,000? In Colombia, the answer is roughly 86 hours. In Luxembourg and Iceland, it’s just 16.

Using data from the OECD on average annual wages and Our World in Data’s figures for annual working hours, Visual Capitalist's Srijaa Chatterjee created this visualization ranking countries by how long it takes the average worker to earn $1,000.

The figures are expressed in purchasing power parity (PPP)-adjusted dollars, which account for differences in local price levels and make incomes more comparable across countries. Taxes are not included.

How Many Hours of Work Earn $1,000?

Workers in the lowest-ranked countries need more than five times as many hours to earn $1,000 as workers in the highest-ranked countries. The gap ranges from 16 hours in Luxembourg and Iceland to 86 hours in Colombia.

The data table below shows the number of hours worked per $1,000 earned by country in purchasing power parity-adjusted dollars:

Rank Country Hours Worked per $1,000 Earned 1 🇨🇴 Colombia 86 2 🇲🇽 Mexico 78 3 🇬🇷 Greece 60 4 🇨🇷 Costa Rica 53 5 🇭🇺 Hungary 51 6 🇨🇱 Chile 51 7 🇨🇿 Czechia 48 8 🇸🇰 Slovakia 47 9 🇵🇹 Portugal 45 10 🇵🇱 Poland 43 11 🇪🇪 Estonia 42 12 🇱🇻 Latvia 38 13 🇰🇷 South Korea 38 14 🇹🇷 Turkey 37 15 🇮🇱 Israel 34 16 🇮🇹 Italy 34 17 🇯🇵 Japan 34 18 🇱🇹 Lithuania 33 19 🇪🇸 Spain 30 20 🇳🇿 New Zealand 28 21 🇮🇪 Ireland 27 22 🇸🇮 Slovenia 27 23 🇫🇮 Finland 25 24 🇨🇦 Canada 25 25 🇫🇷 France 25 26 🇬🇧 United Kingdom 24 27 🇸🇪 Sweden 24 28 🇦🇺 Australia 23 29 🇺🇸 United States 22 30 🇧🇪 Belgium 21 31 🇩🇪 Germany 20 32 🇦🇹 Austria 20 33 🇩🇰 Denmark 19 34 🇳🇱 Netherlands 19 35 🇳🇴 Norway 19 36 🇨🇭 Switzerland 18 37 🇮🇸 Iceland 16 38 🇱🇺 Luxembourg 16

Europe dominates the top of the ranking. Luxembourg, Iceland, Switzerland, Norway, Denmark, and the Netherlands all require fewer than 20 hours of work to earn $1,000.

For comparison, the average American worker needs about 22 hours to earn $1,000, placing the U.S. among the stronger earners but still behind multiple European economies.

Latin America Earns Less While Working More

Colombia and Mexico sit at the bottom of the ranking, requiring 86 and 78 hours of work, respectively, to earn $1,000. Both figures are more than triple the U.S. level and more than four times higher than Luxembourg’s.

While workers in these countries often log similar or even greater annual hours than workers in richer economies, average wages remain substantially lower.

Research highlighted by Our World in Data finds that workers in lower-income countries tend to work longer hours while generating less income per hour worked. Economists point to lower productivity levels, a larger informal sector, reduced access to capital, and weaker wage growth as contributing factors.

Nordic Countries and Luxembourg Stand Out

At the other end of the spectrum are Luxembourg and the Nordic economies. Denmark, Norway, Iceland, and Finland combine relatively high wages with advanced, high-productivity economies.

Analysis from the Becker Friedman Institute and CEPR highlights how strong labor-market institutions, high workforce participation, and substantial investments in education contribute to both high wages and relatively compressed income distributions.

Luxembourg benefits from an especially high concentration of financial and professional services jobs, helping support some of the highest average wage levels in the world.

Why Purchasing Power Matters

The analysis uses purchasing power parity (PPP), which adjusts wages to reflect differences in local price levels. PPP adjustments allow economists to compare what incomes can actually buy in a specific country rather than relying solely on market exchange rates.

Without PPP adjustments, workers in lower-cost countries could appear poorer than they actually are, and vice versa.

Want to explore wage differences across Europe? Check out Mapped: Average Full-Time Salary in Europe by Country on the Voronoi app.

Tyler Durden Tue, 06/23/2026 - 04:15

AfD Co-Leader Demands Ukraine Pay Reparations To Germany

Authored by Andrew Korybko,

Europeans and especially Germans have borne enormous costs to perpetuate the Ukrainian Conflict while receiving absolutely nothing of tangible benefit in return.

AfD co-leader Alice Weidel responded to Chancellor Friedrich Merz’s proposal to grant Ukraine associate membership in the EU, which was analyzed here and here, by declaring that “We need to know how this state-terrorist act against the most important infrastructure we had, namely the Nord Stream pipelines, came about and what role Ukraine played in it. The flow of payments should actually be moving in the opposite direction.”

She then added that, “Ukraine must pay reparations to the Federal Republic of Germany, because we have suffered enormous damage – and so has Europe as a whole – from the loss of cheap Russian fossil fuels.” Weidel made a solid point about the economic damage that the Ukrainian Conflict has caused to Europe, even independently of the Nord Stream terrorist attack, which she implied was committed by Ukraine like Berlin suggested but which the famous Seymer Hersh cited sources to blame on the US.

To elaborate a bit more on the background of Berlin’s innuendo, it sought the extradition from Poland last year of a Ukrainian suspect but was rebuffed by the judge for the reasons explained here, which lent credence in a lot of the public’s mind to the claim of Ukrainian culpability. Nevertheless, that narrative was already counteracted here, here, and here over the years long before the extradition request was made and rejected, but Weidel, many Germans, and a lot of folks across the West in fact still believe it.

In any case, having clarified the context of her implied accusation against Ukraine and circling back to her reparations demand, the EU spent hundreds of billions of dollars on aid for Ukraine and its refugees. When calculating the higher cost of fuel since then, including that which it still purchases from Russia, the total credibly approaches $1 trillion and might even surpass it by some estimates.

The most that the EU might receive in exchange is arms and reconstruction contracts for only a handful of companies.

That nowhere near justifies the enormous costs that the EU has paid to perpetuate the NATO-Russian proxy war in Ukraine, which highlights the ideological motives behind this policy. The liberal-globalists that rule the bloc are hellbent on inflicting a strategic defeat on Russia through NATO-backed Ukraine, to which end no cost is too high to pay, especially since it’s average Europeans and not them that are paying it.

This cynical policy is already backfiring in Germany by turbocharging the AfD’s rise.

It’s now the most popular party in the country by far and its appeal continues to grow since it’s one of the few forces apart from the Sahra Wagenknecht Alliance that’s speaking truth to power about this conflict and its crushing economic consequences for Europeans. Germany in particular has been hit exceptionally hard with growth crawling to a halt and many suspecting that the bloc’s largest economy is actually already in a recession that might soon be confirmed and then spread throughout the EU.

Weidel knows very well that Ukraine will never pay reparations to Germany and that even the hypothetical cession of its key industries to her country wouldn’t come anywhere near compensating the costs that Germans have already paid. Her rhetoric was thus meant to draw attention to these same costs. The more that Germans dwell upon them and realize that their country received nothing of tangible benefit in return, the more likely they are to support the AfD in a bid to bring about real change.

Tyler Durden Tue, 06/23/2026 - 03:30

Rubio Heads To Gulf Capitals As Washington Races To Lock In Iran Deal

US Secretary of State Marco Rubio is scheduled to visit Bahrain, Kuwait, and the United Arab Emirates this week, set for June 23–25, following the weekend breakthrough Switzerland-based negotiations with Iran, Department of State Spokesperson Tommy Pigott announced Monday.

The announcement comes on the heels of indirect talks between Iranian and American officials - the latter delegation which was led by Vice President JD Vance in person, which took place on Sunday in the Swiss resort of Bürgenstock under the mediation of Pakistan and Qatar.

"Secretary of State Marco Rubio will travel to the United Arab Emirates, Kuwait, and Bahrain from June 23-25. The Secretary will discuss a range of regional priorities," Pigott said in the official statement released by State. These countries will likely seek some kind of serious reconstruction reparations for the attacks they suffered through the opening months of Operation Epic Fury.

via Associated Press

According to the spokesperson, Rubio's diplomatic tour will focus heavily on the newly drafted US-Iran memorandum of understanding, alongside ongoing initiatives to restore free, safe, and regular commercial transit through the Strait of Hormuz.

Pressure has also been put on Oman of late to not side with Iranian demands for its own protocol for international vessel passage. Broader regional stability will top the agenda, even as official claims in terms of technical details agreed to by the warring sides is somewhat at odds.

"In Bahrain, the Secretary will also meet with the Gulf Cooperation Council to discuss shared priorities across the region," Pigott added.

The signed MoU accord establishes specific timelines for the United States to eventually dismantle its naval blockade of Iranian ports in exchange for Iran restoring safe shipping lanes through the critical Strait of Hormuz.

This is a big 'if' given that the Iranian side has signaled that this could take a long time, and as a 60-day window for formal negotiations - focusing especially on the nuclear file - is sure to be wrought with many hurdles and hold-ups.

Furthermore, Tehran has committed to refraining from seeking to acquire nuclear weapons. Tehran will seek among primary objectives for these subsequent talks the formal lifting of longstanding anti-Iran sanctions.

But already there's been plenty of disagreement on how that will look as well, in terms of the concrete details.

BREAKING: Secretary of State Marco Rubio will visit the UAE, Kuwait and Bahrain this week as the Trump administration seeks support from Gulf allies for its preliminary Iran agreement.

Rubio is also scheduled to meet with the Gulf Cooperation Council, bringing together key U.S.… pic.twitter.com/e6OvsqUHCc

— Fox News (@FoxNews) June 22, 2026

On Monday the US Treasury issued a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil. There's real positive momentum, this one big development reveals.

While this suggests that Washington is very serious about ending the war at this point, a lot could still go wrong, also as Israel and Hezbollah have continued sporadic fighting in Lebanon. At the moment an uneasy official ceasefire is on in south Lebanon, but this and other key sticking points remain huge question mark issues.

Tyler Durden Tue, 06/23/2026 - 02:45

Starmer's Gone, But UK's Right May Have Little To Cheer About

Authored by Remix News via Modernity News,

The deeply unpopular British Prime Minister, Keir Starmer, announced his resignation on Monday morning, but despite his upcoming departure, the right may have little to cheer about.

During a speech outside Downing Street, Starmer announced he was stepping down after holding office since July 7, 2024. In that election, his Labour Party won 412 seats, securing a comfortable majority and decimating the Tories, who had governed Britain since 2010.

Starmer revealed on the morning of Monday, June 22, that he had already spoken with King Charles III to inform him of his decision. The Labour Party's National Executive Committee will now develop a timetable for the election of a new leader, who will also become Prime Minister. He stressed that this process should be completed by the end of the summer holidays. Until then, Starmer will remain at the helm of the British government.

According to Reuters, the main favorite to replace Starmer is the former Mayor of Greater Manchester, Andy Burnham, who won a seat in the House of Commons during the Makerfield constituency by-election in northwest England on June 18, defeating Nigel Farage's party.

The right now has a challenger

Burnham may pose a grave challenge to Restore Britain and Reform UK, the two main right-wing parties running against the British left.

Under Starmer, multiple polls predicted a strong majority for Reform UK, with some even forecasting a blowout election victory.

However, the rise of Restore Britain had already siphoned off a number of voters from Reform UK, narrowing Farage's lead.

Now, with Starmer gone, some polls show Reform UK barely leading Labour in a general election. A new poll from Politico shows Farage winning 27 percent of the vote versus 20 percent for Labour under Starmer's current numbers - but when tested against Burnham, Labour's chances receive a significant boost. Some within Labour even describe Burnham as a "Reform Slayer," as he polls better against Farage than anyone else in the party.

Nevertheless, the Politico article also describes an uphill battle for Burnham, given how far Labour has fallen out of favour with British voters during Starmer's rule. Notably, Burnham is described as more left-wing than Starmer, who is categorized as a "centrist."

Although the Tories are still seen as a formidable election force, they have long since discarded any semblance of right-wing politics. Nevertheless, they are also siphoning voters away from both Restore Britain and Reform UK, retaining voters who might lean personally to the right but still vote Conservative out of habit.

The combined effect of vote-splitting on the right and Burnham leading Labour could deliver a shock upset in favor of Labour, ending Farage's dream of winning the office of prime minister.

British commentators point out that Starmer's position has been weakening for months. More than 100 Labour MPs - around a quarter of the parliamentary party in the House of Commons - had publicly stated they wanted the prime minister to resign or set a timetable for his departure.

Labour Party members pointed to a total loss of trust in the head of government and his leadership abilities. The government had recently been rocked by a number of high-profile resignations, including Health Secretary Wes Streeting and Defence Secretary John Healey.

Polling also showed that Labour members overwhelmingly wanted Burnham, nicknamed the "King of the North" after winning three consecutive mayoral terms. He is currently Labour's most popular politician. His recent victory in the Makerfield seat also bodes poorly for Reform UK and Restore Britain; the constituency is predominantly white and working-class, representing the exact demographic that these two right-wing parties are seeking to win over from Labour.

Tyler Durden Tue, 06/23/2026 - 02:00

Israeli Troops Deployed To Somaliland In Covert Mission

Via The Cradle

Israel secretly deployed a small contingent of forces to Somaliland earlier this year following its recognition of the breakaway territory, a senior Somali government official revealed to Middle East Eye (MEE) on Monday.

"According to our intelligence reports, the Israeli military selected Israeli soldiers of African heritage, especially Ethiopians, so as not to draw attention to themselves and to blend in more easily with the local community," the senior Somali official stated.

via Reuters

The Somali official said that Israel had deployed a group of 50 soldiers to Somaliland shortly after the recognition and the resumption of the war on Iran in late February.

On June 17, Israeli Defense Minister Israel Katz admitted to years of clandestine, "under the radar" security operations with Somaliland.

During a high-level meeting in Tel Aviv with Somaliland’s visiting president, Israeli officials confirmed that Israel is now directly involved in training the breakaway region's military and police.

"For many years, we cooperated under the radar in a series of operations that will remain classified. Now we are determined to bring our security cooperation to new heights, for the benefit of both peoples and for the benefit of stability in the region," Katz said.

In early June, CNN reported that the breakaway republic of Somaliland had provided Israel with an additional military position on the Horn of Africa, allowing Israeli aircraft to "potentially stop" long-range flights to Iran.

Israel's Channel 12 reported on 2 May that a senior official in Somaliland said the territory is ready to cooperate with Israel to confront what it described as the "threat" from the Yemeni Armed Forces (YAF) to the highly strategic Bab al-Mandab Strait.

The official said that any "disruption of maritime security" would push Somaliland to expand its relations with Israel, including to the level of a security alliance.

The official also noted that Somaliland currently cooperates with partners such as the US and the UAE, which maintain a presence in the territory’s Berbera Port, and said a similar partnership would be possible with Israel. 

AA is probably not happy about this. Reminder that Abdul Malik al-Houthi recently said in a speech that they are monitoring developments on “Somali soil” and that they will mot hesitate to strike israeli bases. https://t.co/3hFw1vdnK5 pic.twitter.com/OEOy3Z2hYr

— barry with the NED (@bonzerbarry) June 22, 2026

The UAE operates the Berbera Port, using it as a logistics hub to transfer arms and mercenaries to the Rapid Support Forces (RSF), which is responsible for committing alleged genocide against non-Arab tribes in Sudan.

Somaliland declared its independence from Somalia in 1991, and in December 2025, Israel became the first and only UN member state to recognize it as an independent and sovereign state. Israel later appointed Michael Lotem as its first ambassador to Hargeisa in April, drawing worldwide condemnation.

Tyler Durden Mon, 06/22/2026 - 23:25

Apollo Gates Private Credit Investors For 2nd Quarter As 17% Rush To The Exits

It would appear that the private credit crisis has not, in fact, been contained.

With the software bounce now dead and buried...

Software bounce is over pic.twitter.com/wcKtRt3NaR

— zerohedge (@zerohedge) June 22, 2026

... amid growing fears that the next round of the SAASpocalypse will be far worse (just look at the spectacular implosion in Accenture stock), the private credit firms that had tons of Software exposure ("but muh cash flows") are once again in the market's crosshairs, and after first Cliffwater, then Blackrock gated investors as redemptions requests soared even more in Q2 compared to the already skyhigh levels in Q1, today it was the turn of Private Equity giant Apollo Global Management to join the club and again limiting withdrawal requests from its largest non-traded private credit fund for retail investors, as broader concerns about the asset class persist. 

Apollo Debt Solutions, which has roughly $25 billion in assets, capped withdrawals at 5% of outstanding shares on Monday after investors asked to redeem 16.8%, according to a shareholder letter first seen by Bloomberg. Redemption requests in Q2 were more than 5% higher than the 11.2% investors wanted to pull in the first quarter when they were gated for the first time.

As shown in the chart below, for those hoping that Q2 redemption requests would moderate, well... the trend is not your friend. 

The fund, taking rare delight in glorious irony, reported that it has generated an 8.1% total net return since it was launched, which however does not appear to have impressed its shareholders who instead want their money and are capped at 5% of it. 

As we reported previously, private credit icon Cliffwater faced requests to pull 17% of shares from its flagship fund, while the world's largest asset manager, BlackRock, received about 13% earlier this month. Both funds enforced a 5% cap for their BDCs.

Apollo President Jim Zelter predicted - correctly - in May that redemptions from BDCs will continue for the next two quarters following a turbulent first quarter for the sector, and that such requests could even increase. Spoiler alert: when software stock puke again, and when BDCs write down their SAAS loans form par to their fair value of plus or minus 0, not only will the requests increase, there may come a day when there is a literal run on the private credit bank, with crowds of people gathering across various lobbies on Park Avenue demanding their money (good luck folks).

 

Tyler Durden Mon, 06/22/2026 - 23:09

Super El Nino: Famine Follows War?

Rory Green, TS Lombard's chief China economist, is the latest Wall Street strategist to warn of the mounting macro and food inflation risks that a super El Niño could release on certain regions of the world.

In a note titled "Super El Niño: Famine Follows War?" Green warns that war-related disruptions to energy and fertilizer markets, compounded by adverse weather conditions, could create a perfect storm for global food prices.

Green said, "In general, El Niño raises temperatures and significantly exacerbates both drought and heavy rainfall. For global macro, it is an inflationary shock via the food price channel – a shock that will likely be compounded by existing war-related high fertilizer costs."

He said within his coverage, "India is the most exposed to both growth and inflation risks, supporting our underweight Indian assets. Brazil and Mexico, too, will receive an inflation impulse."

In recent weeks, the Japanese Meteorological Agency became the first major weather body to formally declare the onset of a super El Niño in the tropical Pacific.

If that forecast is correct, adverse climatic disruption could persist for 2 or more years, raising the risk of drought, flooding, lower crop yields, and higher food prices across key agricultural regions.

Green noted that El Niño has typically been associated with "hotter and drier conditions in India, parts of South and Southeast Asia, and Central America. But at the same time, it brings higher rainfall to parts of southern South America, the United States and Central Asia."

Chart 1: GDP impact of past El Niño

Chart 2: CPI impact of past El Niño

El Niño Impact Watch:

If it proves "strong" or "very strong", the 2026 El Niño is likely to have a historically large impact on global food prices, given already elevated underlying inflation, existing supply-chain disruption and the current high cost of farm inputs. China, Korea and Taiwan are relatively well insulated from the shock. As are most DMs, with the exception of Australia, as the maps below and the charts above show. In our coverage, it is India and LatAm that are most exposed.

India Impact:

El Niño to hit prices, employment and potentially equities

India's Met Department recently warned that El Niño conditions will strengthen during the crucial monsoon season that accounts for ~75% of the annual rainfall the country receives. The Met Department (IMD) has forecast rainfall in the June-September monsoon to be 90% of the long-period average (LPA); if that projection bears out, India will face its worst monsoon since 2015. That year, the IMD had initially predicted below normal rainfall of 93% of the LPA, but the actual rainfall recorded was 86%, leading to drought-like conditions across many parts of India. Even though it is early days yet in this year's season with the rains just about setting in over south peninsular India, indications are that the monsoon is off to a weak start. Rainfall in the first 15 days of June has already been far below normal, as Chart 1 below shows, and the progress of the monsoon across the subcontinent has stalled.

A weak monsoon will exacerbate headwinds to growth that India's heavily energy import- dependent economy has been facing due to the surge in global oil prices. Damage to the summer-sown crop output is a risk to agricultural incomes and rural demand, as well as a potential inflation trigger. Rising food and fuel costs pushed headline CPI higher to 3.9% yoy in May, up from 3.5% yoy in April; May’s food price inflation rose at a faster pace to 4.8% yoy. We expect high commodity prices to spill over into broader inflation, and for headline CPI to breach the upper threshold of the Reserve Bank of India's (RBI) 2-6% flexible target by 3Q/FY27. At its early June policy, the RBI revised up its inflation forecast for FY27 to 5.1% vs 4.6% previously, cautioning against upside risks to its projection. It cited further downside risks to its GDP growth forecast for FY27 that is cut to 6.6% (vs 6.9% previously) owing to supply shocks from both energy and weather-related factors.

The government has been taking proactive measures to combat the El Niño impact, including increasing stocks of rice and wheat in state-run warehouses. How the El Niño impacts the monsoon will be clearer by end-July, when the IMD issues its updated monsoon forecast. July is the key month for crop sowing as the rains typically cover the entire country by the start of the month. Last week, Agriculture Minister Shivraj Singh Chouhan said almost 200 districts (a quarter of India's total) are "most vulnerable" to the impact of El Niño. The monsoon season's impact on crops is determined not just by the quantity of rainfall but also its geographical distribution. The accumulation of water in reservoirs – critical for the winter-sown crop – is also important to track: as of early June, the level was a little lower vs a year ago but higher vs the LPA.

For now, the markets are rebounding after tensions in the Middle East eased, but the Indian economy's resilience will be tested again soon if the monsoon fails: since 1951, 12 of 17 El Niño years have witnessed deficient rains. Foreigners remain net sellers in the equity market, although tax exemptions announced for overseas bond investors are pulling flows into local debt. Equities have been supported by local investors, but returns have been capped as momentum of domestic flows has been flagging recently

Brazil Impact

El Niño could weigh on power, food prices

A 'Super El Niño' could push up inflation, but Brazil is more prepared for extreme weather than in the past. As a country that spans across the South American continent, El Niño has an uneven impact on regional weather patterns. In southern Brazil, overall precipitation, the number of heavy downpours and the severity of storms tends to increase, particularly in the spring. Northern Brazil, including parts of the Amazon basin, tend to have drier weather, as does the country's northeast. While parts of the country's populous southeastern region see a limited impact, key states – including Minas Gerais, tend to be drier than normal. Across the countries, average temperatures tend to rise, and the number of heatwaves tends to increase. These factors, coupled with the greater frequency of extreme weather already effecting the country because of climate change, mean that Brazil runs an even greater risk of severe events this year, similar to the record floods in Rio Grande do Sul state in 2024.

The El Niño adds another layer of uncertainty regarding the economic outlook. Although we do not expect the El Niño to play a decisive role in the direction of the economy in H1/26, it could exacerbate existing issues in the economy, including inflation. Electricity prices, which typically tick up during the dry season (April to October) could rise even more if dry weather has a significant impact on hydroelectric reservoir levels in south-central Brazil, which holds the lion's share of the country's generation capacity. This would force the National Systems Operator (ONS) to continue to maximize the use of high-cost thermoelectric plants to offset the reduction in hydroelectric generation. This would mean that electricity costs would increase in the coming months through the so-called tariff flag systems, which is imposed to cover the costs of thermoelectric generation. Likewise, energy consumption – and spot market prices – tends to increase during heatwaves, as more households use air conditioning. The positive news is that Brazil is entering the dry season, Brazil's hydroelectric reservoirs are in a slightly more comfortable situation than in previous El Niño years, which could limit the impact of the weather phenomenon on power prices.

The El Niño could have an impact on food prices, but not in the short term. When temperatures exceed 40°C for prolonged periods, it generally takes three to four months for the hot, dry conditions to affect fruit and vegetable harvests. The effect on grain and oilseed crops takes even longer. Brazil has already harvested its summer soybean crop and the winter corn crop is in the ground and scheduled for harvest in August and September. At that point, farmers begin planting their summer crops. Even without the El Niño, there are already doubts regarding whether Brazil will manage to expand its soybean and corn crops in the upcoming 2026/27 season. This is because of unfavourable global prices, as well as higher input costs, which could force Brazilian farmers to reduce fertilizer use. While a modest decline in fertilizer application is unlikely to significantly affect yields in a single season, production costs for soybeans and corn will be higher for the 2026/27 season. This increase could influence the cost of meat and biofuels in the following year. In short, pressures from weather and fertilizer prices are present, but their impact on food prices is unlikely to be felt until early next year.

Mexico Impact

The most immediate impact is likely to come through agricultural prices. Adverse weather conditions have historically reduce agricultural output and, with a lag, feed into livestock prices as poorer pasture conditions and water scarcity raise production costs. Agricultural inflation hit 14.33% y/y during the 2023-24 El Niño, nearly three times the headline rate, with fruits and vegetables peaking at 25.69%. The 2026 starting point is no less uncomfortable. Fruits and vegetables spiked to 21.77% in March and, despite easing to 14.38% in May, remain well above headline, leaving the most weather-sensitive part of the CPI basket exposed to a renewed supply shocks. It's worth highlighting that El Niño affects Mexico in distinct ways, with northern states tend to see higher precipitation in winter, which tends to benefit export crops. But the weather phenomenon also boosts the risk of unseasonal frosts and floods that damage, with potential implications for the tomato, wheat, and maize harvests. In the centre-south, El Niño reduces rainfall and coffee, sugarcane, maize, beans, and avocados are the most exposed crops.

Bad timing for Banxico. The central bank cut rates to 6.5% in May and signalled that the easing cycle had likely come to an end, citing weak activity and a resilient peso. We continue to view growth risks as outweighing inflation concerns and believe additional easing in Q3/26 remains possible. However, a moderate-to-strong El Niño would complicate that assessment by pushing up agricultural inflation through supply-side shocks that monetary policy cannot easily offset. This would make any further easing harder to deliver, even as growth concerns continue to mount.

El Niño also exposes structural vulnerabilities to more extreme weather. Along the Pacific coast, warmer sea surface temperatures fuel a more active hurricane season, raising the risk of storm damage to coastal infrastructure and export agriculture. At the same time, the phenomenon puts urban water supply under pressure. Cutzamala, which provides roughly a quarter of Mexico City's water, fell to just 27% capacity during the El Niño. An exceptionally wet 2025 reversed much of that damage, bringing the system back to 67.7% by early June 202 – the highest level in the seasonal cycle in seven years. That buffer offers some protection, but a strong El Niño would still test it.

Green's note builds on a UBS report published earlier this month, which warned that El Niño risks could send food inflation higher across Asia.

The U.S. is not out of the woods just yet. Bank of America analysts warn that the energy shock of the last several months could ultimately feed into food inflation later this year, with a lag (read the report).

Now there has been what Daryna Kovalska, a commodity strategist at BofA, described as an "aggressive positioning washout" in the agriculture trade. However, she believes that the selloff in soft commodities such as corn is well overdone.

Professional subscribers can read the full note here at our new Marketdesk.ai portal. 

Tyler Durden Mon, 06/22/2026 - 23:00