World powers agree on Iranian nuclear deal

Tuesday, July 14, 2015

After over a decade of political wrangling an Iranian nuclear agreement has been reached as officials negotiations in Vienna came to an end. Details of the deal will no doubt emerge over the coming hours and days but the general momentum of talks had been to grant Tehran relief from crippling economic sanctions in exchange for a curtailment of its nuclear programme. It seems that the years of tension between Western powers and Iran have finally paid off, culminating in this historic moment. Front month Brent futures came under fresh pressure early this morning as selling dominated trading activity with the global crude oil benchmark drifting 1.8% lower towards $56.60/bbl. Prices have come under renewed pressure, having broken out of the range that had dominated trading activity throughout May and June, with month-to-date losses of over 11% as expectations of ample supply weigh heavily on market sentiment.

After Monday’s euphoria as a Greek deal was reached, PM Alexis Tsipras faces a fresh challenge today as he seeks a parliamentary vote approving the fresh bailout reforms agreed over the weekend. The Finance Ministry has stated that banks will remain closed until 15th July, set to reopen on Thursday owing to the ECB holding the cap on its ELA unchanged, choosing to hold out for Greek lawmakers to approve the reforms first. After months of what were at times hostile negotiations Mr Tsipras still has his work cut out for him as he must now convince his own party that the terms of the deal are for the best, a difficult obstacle to overcome, especially considering it flies in the face of his pledge to end austerity which secured his leadership only six months ago.

Global equity markets reflected this uncertainty early on today with a hesitant Asian session paving the way for a mixed European open as investor appetite was subdued by a weak trading session in China and doubts over the Greek deal. The initial relief rally seen yesterday has conceded to renewed caution with attention firmly fixed on the Greek parliament to see if they will accept the austerity measures imposed as part of the bailout. The euro - after initially rising above 1.1170 against the dollar - yesterday gave back the day’s gains and slipped to a close just above 1.1000. Activity this morning has seen the single currency remain under pressure, trading towards 1.0980 early on as investors wait with bated breath for the Greek parliamentary vote.

Brent futures slip on news of Iranian nuclear deal

CO1 Comdty Generic 1St CO Fut 2015 07 14 08 21 43

EUR trades under pressure ahead of Greek parliamentary vote

EUR Curncy Euro Spot 2015 07 14 08 21 31

Events for today

0700

DE

Jun

CPI

0930

UK

Jun

CPI & RPI

1000

EZ

May

Industrial Production

1000

DE

Jul

ZEW Survey

1330

US

Jun

Retail Sales

1500

US

May

Business Inventories

Topics: Crude oil, Brent, EUR, Greece
More from: Kash Kamal