Key financial news stories from global media overnight and this morning include the following:
1. Trump Announces Reinstated Blockade on Iran, Proposes 20% Surcharge on Strait of Hormuz Cargo
2. Russian Crude Oil Production Falls to Lowest Level in Two and a Half Years
3. Combined Q2 Trading Revenue for Wall Street's Top Five Banks Expected Near $39 Billion
4. Apple Lawsuit Poses Hurdle for OpenAI's Ambitions to Challenge iPhone
5. Fed Governor Waller Issues Key Statement, Suggests Need for Prompt Rate Hike to Manage Core Inflation
6. Traders Price in Approximately 50% Probability of Fed Rate Hike This Month
Trump Announces Reinstated Blockade on Iran, Proposes 20% Surcharge on Strait of Hormuz Cargo
Former US President Donald Trump stated that the United States will reinstate a blockade on Iranian vessels transiting the Strait of Hormuz and will demand a 20% compensation fee on all other cargo shipped through this waterway.
Trump declared on Monday that the US would become the "guardian" of the strait. His remarks intensified the ongoing dispute between Tehran and Washington over access to the Strait of Hormuz, which has been a focal point of contention as tensions between the two nations have resurfaced.
US Central Command stated in a declaration that US forces would resume the blockade on maritime traffic to and from Iranian ports and coastal areas, effective from 4 p.m. New York time on July 14.
Oil prices surged more than 9% on Monday as traders quickly priced in the potential for renewed shipping delays through the Strait of Hormuz, while stock and bond markets both declined.
Russian Crude Oil Production Falls to Lowest Level in Two and a Half Years
Russia's crude oil production in June dropped to its lowest level in at least two and a half years, as Ukraine conducted near-daily attacks on Russian oil infrastructure.
According to an OPEC monthly report, Russian producers averaged daily output of 8.928 million barrels of crude in June.
This data highlights the significant pressure on Russia's oil industry: the country has been forced to export large volumes of crude oil as Ukrainian drone strikes have led Russian refineries to cut processing rates.
OPEC data based on secondary sources shows Russia's June daily output was 834,000 barrels below its target under the OPEC+ agreement and 61,000 barrels lower than the slightly revised May daily production figure.
Combined Q2 Trading Revenue for Wall Street's Top Five Banks Expected Near $39 Billion
Major US banks are set to kick off the second-quarter earnings season on Tuesday, with five large institutions reporting on the same day. These banks have benefited from increased client trading activity driven by market volatility over the past several months. Analysts estimate that the combined trading revenue for JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., The Goldman Sachs Group, Inc., and Morgan Stanley in the second quarter will approach $39 billion.
Equities trading revenue at most of these banks is expected to be near record highs, just slightly below the peaks reached in the first quarter. Among them, Goldman Sachs' equities trading division is likely to set another record, with second-quarter revenue projected to exceed $5 billion.
Analysts including Chris McGratty from Keefe, Bruyette & Woods noted in a report that banks with significant exposure to Asian equity markets, such as Morgan Stanley, are particularly well-positioned to benefit from volatility in that region.
Apple Lawsuit Poses Hurdle for OpenAI's Ambitions to Challenge iPhone
Apple Inc.'s lawsuit accusing OpenAI of systematically stealing its intellectual property could disrupt the AI company's ambitions to develop hardware devices long before the case is ultimately resolved.
In the lawsuit filed last week, the iPhone maker alleged that OpenAI asked former Apple employees, and even prospective hires, to provide information about unreleased Apple products. Apple also claimed that OpenAI instructed new hires to use a checklist created by a former iPhone design lead at Apple to circumvent its security procedures.
Apple is seeking monetary damages and a court order to stop the alleged conduct and destroy all proprietary materials. Legal remedies may take months or years to materialize, but the consequences of the lawsuit itself are likely to be felt much sooner, as the legal battle could put pressure on OpenAI's hiring and product development plans.
Fed Governor Waller Issues Key Statement, Suggests Need for Prompt Rate Hike to Manage Core Inflation
Federal Reserve Governor Christopher Waller indicated that policymakers may need to raise interest rates in the near term if underlying inflation continues to show broad-based price pressures.
"If this week's core inflation reading comes in hot again, then the FOMC will need to consider tightening monetary policy in the near term," Waller said Monday in prepared remarks for an event in New York.
The US Bureau of Labor Statistics is scheduled to release the latest Consumer Price Index data on Tuesday.
Traders Price in Approximately 50% Probability of Fed Rate Hike This Month
Traders are now pricing in close to a 50/50 chance of a US interest rate increase later this month, as renewed oil price strength and hawkish commentary from Federal Reserve officials signal the central bank could act swiftly to curb inflation.
Pricing in money markets on Monday showed traders increased bets on a 25-basis-point rate hike in July following a new series of US strikes against Iran. The pricing indicated the probability of a hike approached 50%, up from less than 40% earlier in the day, after Fed Governor Christopher Waller stated policymakers may need to raise rates if underlying inflation continues to show broad price pressures.
The yield on the policy-sensitive 2-year US Treasury note, which is most reactive to changes in Fed expectations, rose as much as 7 basis points to 4.28%, its highest level since February 2025. The 5-year yield touched a similar high of 4.37%, while the benchmark 10-year Treasury yield climbed as much as 6 basis points to 4.62%, its highest since May.