Trump Denies Offering Iran Relief, Treasuries Selloff Deepens, More

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What is the main topic discussed in this episode?

Tom Keen 0:00
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Doug Krisner 0:32
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Why is Trump denying reports of possible sanctions relief for Iran?

Doug Krisner 0:35
President Trump says he is open to sanctions relief for Iran in exchange for progress on the nuclear issue. However, later in the day the president pushed back on that reported notion. Separately, we are told Iranian officials have privately expressed pessimism about reaching a deal to end hostilities and reopen the Strait of Hormuz before the US midterm elections in November. Here is Michael Allen, Managing Director of Beacon Global Strategies.
Michael Allen 1:01
I think there is something magic about the midterms because I think the Iranians believe and even if they were conditioned to accept th something serious that that would be a gift to President Trump. I think in their minds they're playing a contributing role to the prospect, the possibility, the likelihood that the President might lose the House of Representatives and possibly even the Senate. And they probably are thinking to themselves they don't want to forestall that because they think they have leverage at least through that particular time period.
Doug Krisner 1:32
That is Michael Allen, Managing Director of Beacon Global Strategy, speaking on Bloomberg's balance of power. Now, Iranian officials have consistently said they are willing to pursue diplomacy, but they do not trust the Trump administration to abide by the terms of any agreement. And to be fair, the White House has similar feelings of distrust toward Tehran. Saudi Arabia has restored about half the flows through its East West oil pipeline. The pipeline was damaged by a Houthi drone strike back on September 10th, and now partial flows of around three and a half million barrels a day have been restored. The East-West pipeline has served as a vital conduit for Saudi oil exports during the Iran War. It's allowed the kingdom to become less reliant on the Strait of Hormuz.
Doug Krisner 2:18
Today, crude oil prices closed well off session highs. After having been up four and a half percent, WTI finished up just two-tenths of one percent to ninety-two dollars sixty cents the barrel. Market psychology is being driven by headlines on the war with Iran.

Why are Treasury yields rising as markets price in more Fed rate hikes?

Doug Krisner 2:34
The equity market retreated today as yields rose across the Treasury curve. We had the SP down seven-tenths of one percent. In the bond market, the yield on the ten-year picked up seven basis points, last quoted in New York at five percent. five point two three percent. Of course the bond market is braced for the Fed to keep raising its policy rate. Here is Bloomberg strategist Ira Jersey.
Ira Jersey 2:55
Well the market thinks that inflation is going to come down over time, but of course the market's been thinking that for the better part of a couple of years. Right. And when you look at some inflation measures, right, we're not too, too far from from two percent, but we're still above that two percent target that the Fed talks about. So I think in order to keep credibility, the Federal Reserve is gonna have to follow the market's lead here and hike rates at least a couple of times.
Doug Krisner 3:18
That is Bloomberg's Ira Jersey. Now the swaps market is currently pricing in at least three more quarter point rate hikes over the course of the next twelve months and the potential for a fourth. Police in the UK have released on bail five men held over an alleged terror plot against a Royal Air Force base used by the US for strikes against Iran.

What is known about the alleged plot against a UK air base used for strikes on Iran?

Doug Krisner 3:40
The men, who are all British nationals, were detained on the first time. On suspicion of terrorism offenses. However, no viable explosives were found at the scene of their arrest.

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