Wealthion Macro Bites-Gulf Quagmire

Gulf quagmire: President Trump said Tuesday Iran had “fully and completely” agreed to nuclear inspections, but Tehran said there were “no plans” for such IAEA oversight. Despite Trump’s insistence on free passage through the Strait of Hormuz, Iran’s chief negotiator Mohammad Bagher Ghalibaf (Speaker of Iran’s Parliament) told state media the Strait will “never return to its pre-war conditions.”

Iranian President Masoud Pezeshkian declared Iran’s ballistic missile program is not subject to negotiation, “The discussion over our missiles does not exist in the MoU, and it never will…If the missiles we have for our defense did not exist, Israel and the United States would have ploughed Iran just like Gaza.”

The U.S. Senate passed a House-backed war powers resolution directing President Trump to halt military action against Iran and withdraw forces unless Congress explicitly declares war or authorizes the use of force. The measure passed 50-48 (4 Republicans voting yea) and is not legally binding.

Bloomberg reports Russia is considering a diesel export ban to avoid domestic shortages following Ukrainian attacks on its refineries. In 2025, Russia shipped 907k bpd of diesel and gasoil internationally, representing 11% of global supplies. Europe’s diesel futures premium to crude oil jumped to 5.9% yesterday.

Due to a glut of domestic zinc supply, Shanghai zinc futures are trading more than $400/t below international benchmarks (biggest discount since ’22). Bloomberg notes this discount is sufficient for Chinese smelters to sell spot cargoes to fabricators in Southeast Asia, but another $100 discount will enable profitable shipments directly to LME warehouses.

Liquidity watch #1: In a Wednesday regulatory filing, South Korea’s SK Hynix (manufacturer of dynamic random-access memory chips and flash memory chips) announced plans to raise 45.45 trillion won ($29.4B) in a U.S. listed ADR due to begin trading July 10. Separately, SpaceX’s $25B “investment grade” bond offering received a peak of $89B in orders.

Liquidity watch #2: 10-year real Treasury yields have climbed to 2.29% (highest since Jan. ’25), but 10-year breakeven yields have fallen to 2.206% (lowest since Apr. ’25). This disparity suggests real yields are rising not due to inflation expectations, but due to a “scale of supply” issue (U.S. deficit and AI issuance). The St. Louis Fed’s 10-year zero-coupon term premium stands at a very elevated at 77bps.

Euro Stoxx 50 -0.45%. S&P futures +0.25% and Nasdaq futures +0.45%. European bonds ticking higher by 2bps-3bps across the board. 10-year Treasury yield -3.0bps (4.467%). DXY dollar index +0.25%, spot gold -1.6% and spot silver -3.0%. Brent futures -2.7% ($74.95) and WTI futures -2.7% ($71.25).

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