Good morning. Here’s what happened overnight and what you need to know today.
1.
Talking points: An unnamed senior White House official told the Associated Press Iran’s “new potential leadership” has indicated it is open to talks with the US following the killing of Supreme Leader Ayatollah Ali Khamenei, and that Donald Trump says he is “eventually” willing to negotiate but that military operations “continue unabated”. The US president told The Atlantic, “They want to talk, and I have agreed to talk,” declining to comment on timing. Iranian state television and the state-run IRNA news agency confirmed Khamenei’s death early Sunday after US and Israeli forces launched a massive military campaign that also killed other high-ranking officials. Iran’s President Masoud Pezeshkian said in a pre-recorded address on Sunday local time that the Islamic Republic considered it its “legitimate duty and right to avenge the perpetrators”, warning: “They will regret this day.” Foreign Minister Abbas Araghchi told Al Jazeera a new supreme leader would be chosen in “one or two days”, after Pezeshkian said an interim leadership council had “begun its work”. (The Atlantic)(BBC)(AP)(Bloomberg)(NYT)(FT)
2.
Death toll: The US military said three service members were killed in action and 5 seriously injured as a result of attacks in Iran, without providing details of how or where they were killed. In a social media post Trump said nine Iranian naval ships had been destroyed and that Iran’s naval headquarters was “largely destroyed”. Earlier, US Central Command said it struck a Jamaran-class corvette that was “currently sinking”. Israeli officials said an Iranian missile strike on a synagogue in Beit Shemesh killed at least nine people. Meanwhile, in southern Iran, the state-run news agency IRNA said the death toll had risen to 165 and that 96 people were injured after a Saturday strike on an all-girls school in the Hormozgan province. A local official said the casualties included students, parents and school staff. In the United Arab Emirates, at least three people were killed by Iranian attacks and Kuwait’s health ministry said one person was killed and 20 wounded in retaliatory attacks by Iran. On Sunday, Israeli Prime Minister Benjamin Netanyahu said Israel was striking “the heart of Tehran with increasing strength” and that the attacks would “only increase even more in the coming days”. The military said it had struck Iranian missile launchers, air defense systems, command centers and headquarters of the regime. Iran, meanwhile, has vowed to continue retaliatory attacks for the US-Israeli attacks. (BBC)(AP)(Bloomberg)(NYT)(FT)(Capital Brief)
3.
The price: Oil markets were bracing for a spike after tanker traffic through the Strait of Hormuz largely came to a halt, with Iran saying it attacked three oil tankers and shipowners imposing a self-declared pause, Bloomberg reported. About a fifth of the world’s oil and liquefied natural gas typically flows through the strait each day. Oil prices had already risen on war fears alone, with international benchmark Brent crude closing at a seven-month high of USD72.87 on Friday. Most traders expect prices to spike when markets reopen in a few hours. Barclays analyst Amarpreet Singh said oil markets were facing their “worst fears”, while Clayton Seigle at the Center for Strategic & International Studies warned a wider war disrupting tanker traffic could push crude past USD90 a barrel and US petrol prices “well above” USD3 per gallon (one standard barrel of oil is 42 gallons). Energy consultant Rystad Energy also said limited strikes could lift prices by USD5 to USD10, but warned that without swift de-escalation it expected a “significant upward repricing of oil at the start of the week”. Meanwhile, OPEC Plus said it would increase production by 206,000 barrels a day in April (up from 137,000 last quarter) and would “closely monitor and assess market conditions”, in what was seen as a modest increase in supplies. (Capital Brief)(Bloomberg)(FT)(AP)
4.
Iran reax: World leaders and communities across the globe reacted sharply to the US- Israeli strikes on Iran and the killing of Supreme Leader Ayatollah Ali Khamenei, with responses ranging from condemnation and calls for diplomacy to celebrations and warnings of escalation. Russia and China condemned the strikes as a gross violation of international law. The Russian Foreign Ministry said the two countries would coordinate action at the UN Security Council, the International Atomic Energy Agency and other bodies. Prime Minister Anthony Albanese said Khamenei “will not be mourned” but warned against escalation, while Foreign Minister Penny Wong said Australia “did not participate in these strikes” and did not want a broader regional conflict. Italy’s Foreign Minister Antonio Tajani said Iran’s hardening position on nuclear and long-range missiles had “posed a threat to everyone”, while condemning Tehran’s retaliatory strikes as “senseless”. NATO said its top commander in Europe was “closely” monitoring developments and would adjust the alliance’s force posture to defend against “potential threats”, including ballistic missiles and drones. Public reaction has been divided. Thousands of Iranian government supporters rallied in Yazd and Isfahan chanting “Death to America”, while hundreds celebrated in Berlin and more than 1,000 gathered in Vienna. In Paris, members of the Iranian diaspora marched calling for regime change, as a small counterprotest denounced “American imperialism”. In the US, protests emerged in New York opposing the strikes, as some lawmakers pushed for a war powers vote this week to curb Trump’s authority on future action without congressional approval. (FT) (Capital Brief)(Reuters)
5.
Dividend boost: Australia’s biggest companies delivered one of the strongest reporting seasons in decades, despite an earnings period defined by AI-related gloom, mass layoffs, indiscriminate poundings for tech firms and shock walk-outs by multiple blue-chip CEOs. MST Marquee data showed it was the second best in the last 51 reporting periods for the percentage of earnings upgrades across ASX 200 companies, trailing only the post-Covid reporting period in February 2021. Betashares investment strategist Tom Wickenden told Capital Brief that while the ASX 100 had negative earnings growth in FY24 and FY25, “after the reports this season, it looks like we’re on track for a double-digit earnings for FY26”. ASX 200 companies declared dividends worth more than $35 billion overall, with total dividends up 6.9% year on year, according to analysis from Plato Investment Management. Plato said 61% of companies increased dividends, 13% declared a flat dividend and 27% reduced payouts. Senior portfolio manager Peter Gardner said the “strong dividend season” was driven by a turnaround in resources stocks, highlighting BHP’s 52% dividend increase, Fortescue’s 24% and Evolution Mining’s 186%. Consensus forecasts for the Big Four banks’ 2026 earnings were upgraded by around 3%, while fears of a so-called ‘SaaS-pocalypse’ tore up hopes of a rebound in local tech stocks. (Capital Brief)
6.
Charge roadblock: It is looking increasingly like road-user charging, a key reform touted by the Albanese government during its economic roundtable last August, will not be the subject of significant progress in the 12 May Budget. Treasurer Jim Chalmers emerged from last year’s summit championing road-user charging, telling reporters: “Right around the table, people had a view that this is an idea whose time has come and so we will do the work.” The reform was promoted amid acceptance that in coming years the rise of electric vehicles will reduce the Commonwealth’s fuel excise take, which it uses to build and maintain roads. State and territory treasurers then agreed to work together to design a way to require EV owners to pay a distance-based charge so they can make a fair contribution to road construction and upkeep. A key sticking point, however, is which level of government will collect the revenue. The Commonwealth wants the money to go straight into their coffers, while states argue that because they already have all relevant details of car owners through their car registration system, it makes sense that they should hold the purse strings. Two sources in different state governments told Capital Brief there had not been substantial inter-governmental talks on that question. A spokeswoman for Transport Minister Catherine King said a three-year taskforce set up last December was working on design, consultation and implementation arrangements. (Capital Brief)
7.
Insurance cancelled: Insurers on Saturday told ship owners they would cancel policies and raise cover prices for vessels sailing through the Gulf and Strait of Hormuz after the US and Israel attacked Iran, the Financial Times reported. War risk insurers submitted cancellation notices for ships transiting the key oil chokepoint before trading resumes on Monday, brokers told the FT, with premiums set to climb by as much as 50% in the coming days. The move came as Iran launched retaliatory strikes against US bases across the Middle East. Dylan Mortimer, marine hull UK war leader at broker Marsh, told the FT that war risk insurance for ships travelling through the Gulf had been about 0.25% of a vessel’s replacement cost and could rise by as much as 50% from that level. For a USD100 million vessel, that would increase the cost from USD250,000 to USD375,000 per voyage. Insurance for ships calling at Israeli ports, previously about 0.1% of a vessel’s cost, could also jump by half, he said. Mortimer said insurers were also pricing in expectations that Iranian proxies may try to board and seize vessels. (FT)
8.
Striking odds: Six newly created Polymarket accounts made around USD1 million in profit betting the US would strike Iran by Saturday, with several new cryptocurrency wallets collectively making over USD1.2 million related to the strikes, according to reports. Bloomberg reported that USD529 million was traded on Polymarket contracts tied to the timing of the strikes, including about USD90 million on a 28 February contract alone, making it the most popular date on the platform. The trading patterns are hallmarks that blockchain analysts associate with insider trading in prediction markets, an industry without widespread oversight and no agreed-upon methodology for distinguishing luck from leaks, Bloomberg noted. Business Insider reported users bet at least USD255 million on Kalshi and Polymarket on Khamenei’s killing and strikes in Iran, including at least USD200 million staked on four Polymarket wagers and almost USD55 million on Kalshi contracts before activity was halted. Bubblemaps SA said the six accounts were all freshly created in February and had only ever placed bets on when US strikes might occur, with some shares purchased hours before the first explosions were reported in Tehran, according to Bloomberg. The Wall Street Journal reported a sharp surge in Polymarket odds hours before the strike, and detailed payout disputes that led Kalshi to refund fees and reimburse traders at a cost of USD2.2 million. (Bloomberg)(BI)(WSJ)
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