Facing a broad decline in education test scores, the government in 2024 banned smartphones from schools and has given teachers back more powers to enforce discipline in the classroom
International News via Reuters:
Norway is imposing a near ban on the use of generative AI tools by elementary school pupils while also restricting their use in the education of older children to prevent a negative impact on learning, the country’s prime minister said on Friday.
Facing a broad decline in education test scores, the government in 2024 banned smartphones from schools and has given teachers back more powers to enforce discipline in the classroom.
Using AI increases the risk that young children skip important steps in their education, Prime Minister Jonas Gahr Stoere told a press conference on Friday.
“The most important thing in school is that our children learn to read, write and do mathematics,” Stoere said, adding that the new standards will be imposed from the new school year beginning in late August.
Pupils from first through seventh grade, aged 6 to 13, should as a general rule not be using AI, while those in lower secondary school, aged 14 to 16, can cautiously adopt tools under teachers’ supervision, the government said.
In upper secondary education, from ages 17 to 19, students should learn to use AI appropriately so that they are prepared for further education and work, it added.
Norway began adopting computers in classrooms in the 1990s and tablets after the introduction of the iPad from 2010 onwards, reducing the reliance on books and handwriting.
But in a related statement on Friday the government also said it will propose legislation to fund the use of more books in classrooms, reversing the trend towards computer tablets.
The Norwegian government in April also announced plans to ban children from using social media until they turn 16, following a trend pioneered by Australia and some other nations to reduce young people’s use of electronic devices.
Reporting by Terje Solsvik; Editing by Kirsten Donovan
Congo, playing in their first World Cup for 52 years, frustrated Portugal in a 1-1 draw that left the European side with just one shot on target despite completing 740 passes, prompting a barrage of criticism
International News via Reuters:
The Portugal squad are shutting out criticism of the team and captain Cristiano Ronaldo following an underwhelming draw in their World Cup opener against Democratic Republic of Congo, defender Ruben Dias said on Friday.
Congo, playing in their first World Cup for 52 years, frustrated Portugal in a 1-1 draw that left the European side with just one shot on target despite completing 740 passes, prompting a barrage of criticism.
Ronaldo, in particular, found himself in the firing line as the 41-year-old’s goal drought at major tournaments extended to 10 games stretching back to the 2022 World Cup, despite being the all-time top scorer.
“The criticism is not significant for us, it’s noise and part of the competition … It’s all noise,” Dias told reporters at Portugal’s training camp.
“It always happens if you have a match that doesn’t go well. We’re closing ourselves off from unnecessary criticism.”
The Portugal captain was dealt a sharp critique by former France striker Thierry Henry, who suggested Ronaldo was playing for personal glory rather than team success.
“One thing that’s important: the team needs to score, not you need to score,” Henry said in his analysis on Fox, adding that Ronaldo was getting in the way of team-mates in a better position to score.
RONALDO ‘USED TO MEDIA PRESSURE’
But Dias refused to single out Ronaldo, who is competing in his sixth World Cup.
“Cristiano, of course, is used to dealing with the media pressure we usually face in the club, the national team, world tournaments, European competitions,” Dias said.
“In this sort of competition, it will never be perfect … This is a competition you can win only if you play well game after game,” he added.
READY FOR UZBEKISTAN CLASH
Dias, who was benched for the opener while recovering from injury, declared himself ready to play for Tuesday’s second group match against Uzbekistan.
Having faced Congo’s defensive back five, Portugal could encounter a similar strategy from Uzbekistan, and Dias said it was a tactic he had seen repeatedly while playing for Manchester City.
“I come from playing most of my club matches against teams that use a back five, so I have a very clear idea about it,” Dias said.
“Respecting positional discipline becomes decisive in matches like these.
“I believe we have players with enough quality that, by respecting our positions and making the right decisions, we can make the difference.”
Reporting by Rohith Nair in Miami;Editing by Helen Popper
The public is advised that on Tuesday June 23, a Special Joint Session of the Legislature will be convened by the Commonwealth Parliamentary Association (CPA) Bermuda Branch in tribute to the Hon. Sir John W.D. Swan, KBE, JP.
The session will take place at 2.00 p.m. in the House of Assembly Chamber, Veritas Place, and bring together current and former Members of Parliament and Senators in recognition of Sir John’s distinguished service to Bermuda.
Members of Sir John Swan’s family will be present in the House.
This special sitting provides an opportunity for parliamentary colleagues, past and present, to pay tribute to Sir John’s legacy and contributions to Bermuda.
Please note that this Joint Session is not open to the public, however, members of the public are encouraged to follow the proceedings live via:
Six-week assessment to examine patient flow and capacity pressures
Bermuda Hospitals Board (BHB) has confirmed that Acumentice, a UK-based healthcare consultancy, has been contracted to conduct the independent operational review of the Emergency Department (ED) at King Edward VII Memorial Hospital.
The engagement follows the Ministry of Health’s directive for an independent assessment to support immediate and sustained improvements within the Emergency Department. The review will take approximately six weeks to complete, with the external team expected to arrive in Bermuda in the coming weeks to begin on-site work.
Acumentice will examine patient flow, capacity pressures, operational processes, and opportunities to strengthen emergency care services. The review is intended to provide evidence-based recommendations that support frontline staff, improve patient experiences, and enhance the efficiency and effectiveness of emergency care delivery.
As an independent statutory authority established under the BHB Act, BHB operates under its own governance framework, policies, and procurement procedures. While BHB is publicly funded and committed to transparency and accountability, it is separate from the Government of Bermuda and conducts procurements in accordance with its own Financial Instructions, General Orders, and Board-approved governance requirements.
To facilitate the time-sensitive review, BHB exercised its emergency procurement authority under an Exceptional Resolution adopted by the Board on 22 April 2026 authorizing the Chairman and the Executive Committee (ExCo) of the Board to oversee and conduct the procurement process. While the procurement process was expedited, it was conducted under a documented emergency procurement framework that incorporated defined evaluation criteria, governance safeguards, and oversight measures designed to adhere as closely as possible to the principles of transparency, fairness, accountability, integrity, competition, and value for money.
The procurement was conducted using a Competitive Negotiations approach, a recognized procurement method used by public authorities in Bermuda and consistent with established procurement practices. The process permits competitive negotiations where an urgent requirement makes open tendering impractical, provided the urgency was neither foreseeable nor caused by delay on the part of the procuring authority. To ensure fairness, transparency, and effective competition, BHB conducted a structured process involving at least seven vendors. All participants received the same documentation, requirements, evaluation criteria, and responses to vendor questions. The process included blind scoring for shortlisting, interviews, reference checks, and contractual negotiations.
With respect to public disclosure, BHB remains committed to transparency and compliance with Bermuda’s Public Access to Information (PATI) legislation. Information regarding the contract awarded to Acumentice will be disclosed in accordance with BHB’s normal disclosure practices and statutory obligations, including publication of contract information through the mechanisms routinely utilized by BHB and reflected on the organization’s website.
The independent review comes as BHB continues to make progress in addressing longstanding pressures within the Emergency Department. Since the implementation of the Bed Capacity Management Plan, measurable improvements have been achieved across the hospital system. Median boarding times in the Emergency Department have decreased from approximately 50 hours earlier in 2026 to approximately 20 hours in May 2026, representing a reduction of about 60 percent.
Emergency Department overcrowding has also eased, supported by enhanced discharge processes and the introduction of a new discharge lounge. Most patients who are not admitted continue to be treated and discharged within a median of less than four hours, while admitted patients are experiencing significantly shorter waits as patient flow initiatives take effect.
A Bermuda Hospitals Board spokesperson said: “This independent review reflects our commitment to ensuring that the Emergency Department is equipped to meet current and future demands. The recommendations provided by Acumentice will help inform the next phase of improvements and support our goal of delivering a more responsive and sustainable healthcare system for all residents.”
The spokesperson continued: “Our staff have worked diligently to improve patient flow and address capacity challenges across the hospital, and we are encouraged by the progress that has already been achieved. This review provides an opportunity to benefit from external expertise and benchmark our operations against international best practices. We look forward to working with the Acumentice team and using their findings to identify practical measures that can further enhance efficiency, strengthen patient flow, and support the delivery of high-quality care.
Further updates will be provided once the review team arrives on the island and the assessment is formally underway. Once the review is complete, BHB will share the findings with the public. The Bermuda Hospitals Board remains committed to transparency and will provide an update on the findings at the conclusion of the review.
A migratory sea bird known as a brown skua found in Western Australia’s Cape Le Grand National Park tested positive for avian influenza, and further testing is being conducted to confirm the strain
International News via Reuters:
Australia has detected its first suspected mainland case of H5N1 bird flu in a remote part of the country’s southwest, authorities said on Friday.
A migratory sea bird known as a brown skua found in Western Australia’s Cape Le Grand National Park tested positive for avian influenza, and further testing is being conducted to confirm the strain, said state Agriculture Minister Jackie Jarvis.
“We are taking the suspected case of H5 bird flu seriously,” Jarvis said. “If this is confirmed H5 bird incursion, there will be a rapid and coordinated national response.”
The virulent strain of H5 bird flu has spread through wild bird and mammal populations since 2021, killing millions, infecting poultry and dairy farms and even some farmworkers.
Australia is the only continent without a confirmed mainland case of the deadly strain. H5 was confirmed on Heard Island, a sub-Antarctic Australian territory in late 2025.
The country has been preparing for the arrival of H5N1 bird flu by tightening biosecurity at farms, testing shore birds for disease, vaccinating vulnerable species and war-gaming response plans.
“While, if confirmed, this would obviously be a very concerning development, Australia has spent the past few years preparing for this likelihood,” Environment Minister Murray Watt said in a statement.
Results confirming whether the now-deceased brown skua had contracted H5 bird flu is expected on Saturday, Jarvis said.
She added that another sick bird, a giant petrol, was also found in the same area and is being tested for influenza.
Wayne Boardman, a wildlife veterinarian and associate professor at Adelaide University, said the virus could devastate Australia’s native wildlife.
“This strain of bird flu has caused huge die-offs of birds and sea mammals,” he said.
“My concerns are that if the H5N1 avian flu virus is confirmed, it will pose a huge risk to some of our more endangered shorebirds, some of our coastal raptors, and our precious, unique, endemic and endangered Australian sea lions, whose population is precarious.”
Reporting by Christine Chen in Sydney; Editing by Muralikumar Anantharaman, Susan Fenton and Kate Mayberry
Khan, 56, denies the allegations madeb against him
International News via Reuters:
Britain’s Bar Standards Board said on Friday it had imposed an interim suspension of Karim Khan, who had been the International Criminal Court’s chief prosecutor before he was suspended by the court on June 8 over sexual misconduct accusations.
“Under the BSB’s Enforcement Regulations, the interim suspension must now be considered by an Interim Suspension Panel at a hearing within the next four weeks,” the board said, adding that the suspension was effective immediately.
Khan, 56, denies the allegations madeb against him.
Reporting by Stephanie van den Berg and Sudip Kar-Gupta; Editing by Makini Brice
Burnham, the Greater Manchester mayor nicknamed “King of the North”, won the contest in Makerfield in northwest England with 54.8% of the vote, beating the candidate for Nigel Farage’s populist Reform UK party, on 34.5%
International News via Reuters:
Labour mayor Andy Burnham cleared a path on Friday to ousting British Prime Minister Keir Starmer, potentially ushering in a new bout of political instability, by decisively winning a parliamentary seat in northern England.
Burnham, the Greater Manchester mayor nicknamed “King of the North”, won the contest in Makerfield in northwest England with 54.8% of the vote, beating the candidate for Nigel Farage’s populist Reform UK party, on 34.5%.
The scale of Burnham’s victory in what could be the most consequential by-election in more than six decades puts him in a strong position to challenge Starmer, struggling with some of the worst popularity ratings of any British leader.
Burnham indicated he wanted to counter the rise of polarising, populist politics, saying his victory was a chance to turn “away from the path that takes us to a divided, dark politics of the kind we see in the United States”.
Attention now turns to the timing of his move, and whether he can convince the prime minister to relinquish power without a potentially disruptive leadership contest.
BURNHAM HAILS VICTORY AS A ‘TURNING POINT’
In his victory speech, Burnham said the result could be a “turning point”.
“We must hear it, we must act upon it, and we must get it right,” he said. “There will be no second chance.”
Starmer, who has said he will fight on, quickly congratulated Burnham, saying on X: “Voters chose Labour’s campaign of hope and optimism over division and hate.”
Burnham, a 56-year-old career politician who has backed the nationalisation of key public services and criticised what he called four decades of failed neo-liberal economics, has said he would stand in any contest to replace Starmer.
Polls indicate he would win a leadership contest decided by party members, although some Labour lawmakers hope that process can be avoided.
That would mean Britain installing its seventh prime minister in just over a decade, the highest turnover in nearly two centuries – a reflection of voter anger at successive failures to improve living standards and public services and tackle illegal immigration.
LABOUR DIVISIONS DEEPEN AS PRESSURE GROWS ON STARMER
Two years after a landslide national election victory, Starmer, 63, is one of the least popular British premiers since polling records began. Scandals, policy U-turns and accusations of indecision have derailed delivery of the change he once promised.
About a quarter of his lawmakers have urged him to quit since Labour suffered heavy losses in local elections last month. Senior colleagues, including the defence and health ministers, have resigned over his leadership.
Starmer insisted this week he would stand in any leadership contest and warned his party about the dangers of a potentially divisive leadership campaign.
But several Labour lawmakers said the scale of Burnham’s win would force Starmer to consider stepping aside.
Culture minister Lisa Nandy, a prominent Burnham ally, told reporters she expected both men to speak soon. She ruled out quitting the cabinet but said she could not speak for others.
BURNHAM RETURNS TO LONDON WITH MOMENTUM
Burnham will return to London, the heart of government, with the credentials of someone who can defeat the insurgent Reform party, said one Labour lawmaker.
Many Labour members of parliament fear losing their seats in the next election, due in 2029, to Farage’s party, which leads opinion polls.
Another of Starmer’s rivals, former health minister Wes Streeting, said this week he would force a contest soon unless the prime minister announced when he would stand down. He said Burnham’s victory was proof that Labour needed to change.
Party rules require 20% of the parliamentary party, or 81 lawmakers, to announce they are backing a single candidate to trigger a leadership challenge.
During a month-long campaign, Burnham has acted like a prime minister-in-waiting, often explaining policies for a potential future government. But he has been forced to reassure nervous investors by insisting he would stick to strict fiscal rules.
Last year, he had said Britain was “in hock” to the bond markets, which were promptly rattled by the implication that he would increase government borrowing. He has since said those comments were misrepresented.
Reporting by Andy Bruce, Andrew MacAskill and Elizabeth Piper; Editing by Raju Gopalakrishnan and Kevin Liffey
Jean-Noel Barrot told broadcaster franceinfo there would be no stability in the region unless U.S. talks with Iran also dealt with Iran’s ballistic missile programme and support for proxies
International News via Reuters:
France wants to play a role in talks dealing with Iran’s nuclear programme and will not approve the lifting of UN sanctions unless it is satisfied by the terms of a final accord, its foreign minister said on Friday.
Jean-Noel Barrot, whose country is a veto-wielding member of the United Nations Security Council, told broadcaster franceinfo there would be no stability in the region unless U.S. talks with Iran also dealt with Iran’s ballistic missile programme and support for proxies.
“The return for major concessions that will be asked of Iran is the lifting of sanctions, sanctions that were taken at the United Nations,” he said.
“France is a permanent member of the United Nations (Security Council) so as was the case 10 years ago, France will have to give its approval for the sanctions to be lifted.”
The agreement reached between the United States and Iran this week calls for negotiations over Iran’s nuclear programme to take place over the next 60 days, with a final deal to be endorsed by the Security Council.
European powers fear an inexperienced U.S. negotiating team may fail to secure a robust nuclear agreement or address Iran’s ballistic missile programme in the next phase, risking a prolonged standoff.
France, Britain and Germany want a role shaping the coming talks after being sidelined in recent months.
The three countries first engaged Iran on its nuclear programme in 2003 and later worked with then-U.S. President Barack Obama to secure a 2015 deal to curb Iran’s nuclear programme in exchange for sanctions relief.
U.S. President Donald Trump has been disparaging of that accord, which he pulled the U.S. out of during his first presidency.
“Our objective is to get major concessions from the Iranian regime, a radical change in posture. And we will have our word to say, because as a member of the UNSC it will be necessarily linked to the resolution of this crisis,” Barrot said.
Reporting by John Irish and Dominique VidalonEditing by Makini Brice and Peter Graff
Sales volumes in May rose 1.2%, the Office for National Statistics (ONS) said
International News via Reuters:
British consumers did more shopping in May and April’s sharp drop was revised up as hot weather boosted sales of summer items like fans and paddling pools, data showed on Friday, suggesting households were shrugging off inflation concerns.
Sales volumes in May rose 1.2%, the Office for National Statistics (ONS) said, well above economists’ forecasts for a 0.5% increase in a Reuters poll. A 1.3% drop in monthly sales in April, when fuel costs jumped due to the Iran war, was revised to a smaller 1.0% decline.
Compared with a year earlier, volumes were 3.2% higher in May, against economists’ expectations for a 1.9% rise.
“May’s rebound in retail sales was helped by the weather but also shows consumers have been surprisingly resilient to higher energy prices,” said Rob Wood, chief UK economist at Pantheon Macroeconomics.
“Looking across the soft and hard data, we are led to the conclusion that households have been treating higher energy prices as a temporary state of affairs that they can smooth their spending through.”
CHALLENGES REMAIN DESPITE SALES JUMP
Sterling was little changed against the U.S. dollar after the figures were published on Friday.
The retail sales data was published after Labour mayor Andy Burnham won a key parliamentary election that clears the way for him to challenge Prime Minister Keir Starmer, potentially ushering in a new bout of political instability.
Excluding petrol, overall sales volumes were also up 1.2% in May after contracting by 0.1% in April, and rose 4.6% in annual terms, helped by strong demand for clothing and online sales.
Department stores posted their largest three-month rise since September 2024, and industry analysts said retailers were focusing on tempting shoppers with seasonal promotions.
“Retailers are trying to keep prices low for customers despite ongoing cost pressures, using promotions and a strong focus on value. With the World Cup and the busy summer shopping season ahead, they will be hoping this helps continue the momentum,” Sandra Prince, head of consumer at Lloyds Bank, said.
Earlier on Friday, however, a survey showed that while consumer confidence held steady in June, younger people were the least optimistic in two years about the economy and their personal finances. Households as a whole were the least willing to make big item purchases since January 2025.
Major British retailers have said the Middle East conflict is still creating uncertainty for consumers. They have cited grounds for optimism following U.S. President Donald Trump’s interim deal with Tehran, but continue to monitor the impact on their costs.
Supermarket groups Tesco and Morrisons both reported a slowdown in sales growth since the start of the conflict.
ECONOMY SHRANK IN APRIL
Britain’s economy contracted for the first time in monthly terms since August in April, figures showed last week, but the Bank of England this month nudged up its forecast of underlying quarterly growth for the current quarter to 0.2% from 0.1%.
The BoE held interest rates at 3.75% on Thursday, but two of its policymakers voted for a quarter-point hike.
Financial markets price in only a 15% chance that the BoE will raise rates by a quarter-point next month, and do not fully price in a quarter-point hike until December.
Separate ONS data, published on Friday, showed Britain ran a larger-than-expected budget deficit in May as higher inflation pushed up the cost of servicing inflation-linked debt.
Reporting by Suban Abdulla; additional reporting by James Davey; Graphic by Pasit Kongkunakornkul; Editing by Sarah Young and Helen Popper
A senior European Commission official said cases where the absence of a family member providing care would force the elderly beneficiary of the Withdrawal Agreement to leave the host state were evaluated on merit
International News via Reuters:
Daniel Northover left his home in Liverpool this month, which marks the 10th anniversary of Britain’s Brexit referendum, to move in with his 80-year-old mother in Turre, a town of 4,500 people in Andalusia in southern Spain.
After his stepfather died last summer, Northover, 53, has taken turns with his sister to travel back and forth to Spain to care for his mother Carole, who cannot cook, clean or dress by herself after suffering several strokes.
But with non-EU residents only allowed to remain in the bloc for 90 days in every 180 without a visa, he said it had become unsustainable. A project manager for local councils and charities, Northover did not meet the requirements for a working visa. Visas to care for a dependent family member are only available if it is the UK citizen needing the care.
A senior European Commission official said cases where the absence of a family member providing care would force the elderly beneficiary of the Withdrawal Agreement to leave the host state were evaluated on merit. Otherwise, general migration rules applied.
Northover’s sister’s application for a family reunification visa was rejected.
That left Northover and his partner with no choice but to sell their house to raise the funds for a so-called “non-lucrative” visa — which bars them from working — and become full-time carers.
“The way the (Brexit) withdrawal agreement was written means we’ve had to give up our lives and careers,” Northover said.
“The agreement was terrible. They didn’t think it through,” said Carole, waving her fist in anger as she sat in her wheelchair in the Spanish sun next to her son.
“I’m so ashamed I’ve caused [my children] this stress.”
‘A RECURRING PROBLEM’
Northover’s situation mirrors that of tens of thousands of families of British retirees in Spain scrambling to find ways to care for their infirm parents abroad.
Britain voted by 52% to 48% in a referendum on June 23, 2016, to exit the European Union after more than four decades of membership. The decision meant an end to Britons’ automatic right to live and work without restrictions in EU member states.
Spain’s resident British population, the largest in the EU at around 266,000 according to official statistics, is ageing fast. The number of over-75s has grown from 36,000 in July 2016 to over 51,000 at the start of last year, Spanish data shows.
“This is a recurring problem that isn’t going to go away,” said Sally Myburgh, a British resident of Malaga who runs a Facebook group offering advice for navigating Spain post-Brexit.
Myburgh said she regularly encounters families in Northover’s situation.
“The attitude is they should just go back to England… but these people are at the end of their lives,” she said of the retirees. “This is their home.”
‘EVERYONE KNOWS ME HERE’
The number of Britons living in Spain has remained largely stable since the Brexit vote, official data shows. About a third of them are pensioners, and many live in villages and towns dotted along Spain’s Costa Blanca and Costa del Sol coastlines.
The Spanish social care system provides home care to infirm citizens and residents, but this is capped at 94 hours a month for those classified as suffering from a “total loss of autonomy” – around 3 hours a day.
Returning to the UK is a daunting and unrealistic prospect for those who have spent decades in Spain and have no community or property to return to, said Neal Anderson, a welfare officer at the ‘Help at Home Costa Blanca’ charity providing support to elderly Britons in the area.
“My mum is 80. A major upheaval is distressing. Uprooting her to a place she doesn’t know with people she doesn’t know… it could kill her,” Northover said, adding he feared that even if she survived the move, registering her in Britain’s overburdened social care system would take months.
“I can’t imagine living [in the UK] now… I love Spain… This is home,” said Carole, who voted to remain in the EU. “Everyone knows me here.”
Reporting by Victoria Waldersee, Michael Gore; Editing by Gareth Jones
The ECB last week raised borrowing costs for the first time in three years
International News via Reuters:
The European Central Bank may raise interest rates one more time as soon as next month if it sees more evidence of euro zone inflation spreading beyond energy, ECB policymaker Pierre Wunsch told Reuters, even as the U.S.-Iran deal dents oil prices.
The ECB last week raised borrowing costs for the first time in three years. Since, then an interim peace deal between Washington and Tehran triggered a sharp fall in oil prices, easing concerns about a prolonged energy-driven inflation shock.
Wunsch, who heads Belgium’s central bank and is often seen as a policy hawk who favours higher rates, said a confirmed deal should reduce inflation and support euro zone growth — potentially even leading to an oil glut next year.
But he argued the euro zone’s central bank may still need to raise rates again if inflation rises in sectors such as services – and even if that move may end up being reversed.
“We had a not-so-nice reading of services inflation,” Wunsch said in an interview with Reuters, conducted on Thursday. He was referring to a rise in the euro zone’s services inflation rate to 3.5% in May from 3.0%.
“If we see more of that, maybe you want to hike another 25 basis points to be on the safe side, and then you can cut rates when you start seeing the dynamics in the other direction.”
The ECB’s deposit rate currently stands at 2.25% and financial markets expect a fresh 0.25 percentage-point increase in September or October, possibly followed by one more in the early months of next year.
JULY OR SEPTEMBER DECISION HINGES ON DATA
Sources told Reuters after last week’s move that policymakers saw a hike in September as more likely than one in July, unless oil prices rebounded.
Wunsch said he would support waiting until September only if incoming data proved inconclusive, stressing the need to monitor inflation in sectors not directly tied to energy, as well as wages.
“If the data is not going in the right direction, I would plead for a second hike and not for waiting,” he said.
“But if what we see is ambiguous, I don’t see a need to rush.”
The ECB’s Chief Economist Philip Lane told Reuters earlier this week the bank would continue to be “proactive” in its fight against high inflation even after the Iran deal.
OIL GLUT RISK AND ‘LOOKING THROUGH’ INFLATION
Last week’s rate rise was unanimous by the ECB’s Governing Council.
Wunsch acknowledged that, with an Iran deal now in place and wage growth already moderating, an argument could be made that the ECB may have skipped last week’s increase and “looked through” the energy-driven inflation spike.
He said he had even warned colleagues last week about the risk of an oil glut within a year, potentially pushing crude prices below pre-war levels.
Still, he stood by the ECB’s decision, noting it was taken at a time of rising inflation and heightened uncertainty.
“Have we made a mistake? No,” he said. “We have hiked 25 basis points when inflation is going up, so real rates have actually declined slightly, and we can cut at some point if need be,” he added.
CALL FOR CLEARER CONDITIONAL GUIDANCE
He believes, however, that the ECB could go beyond its mantra that it makes decisions “meeting by meeting” depending on the data, saying “at some point it would not mean anything”.
Instead he advocated giving conditional guidance.
“I would have been comfortable saying, for instance: ‘we will probably have to do more if the conflict doesn’t end soon’,” he said. “Now it seems to be ending.”
Reporting by Francesco Canepa; Editing by Susan Fenton
The MSCI All-World index was down 0.14%, flipping into negative territory after U.S. Vice President JD Vance pulled out of a planned trip to meet Iranian negotiators in Switzerland on Friday
International News via Reuters:
Global shares fell and oil prices got a boost on Friday after U.S. and Iranian negotiators called off peace talks, while the risk of official Japanese intervention mounted as the yen traded on the brink of a 40-year low.
The dollar headed towards its strongest weekly gain in a month, mostly at the expense of the yen, which has fallen for five out of the last six weeks to trade close to its weakest since late 1986, prompting a volley of warnings from officials in Tokyo that intervention is an option.
The MSCI All-World index was down 0.14%, flipping into negative territory after U.S. Vice President JD Vance pulled out of a planned trip to meet Iranian negotiators in Switzerland on Friday.
European stocks, meanwhile, managed to stay in positive territory, kept afloat by drugmaker stocks Novo Nordisk, AstraZeneca and Novartis.
CEASEFIRE CONFIDENCE WANES
The Israeli military said it carried out strikes overnight and continued attacking what it described as Hezbollah militants and infrastructure in several areas in southern Lebanon.
Confidence in a lasting truce ebbed, pushing oil up modestly to $80 a barrel, although the price was still headed for a drop of 8% this week, after the U.S. and Iran signed an agreement to halt fighting and reopen the Strait of Hormuz.
Tankers have started sailing through the strait, which the war effectively closed, after the U.S. lifted its blockade on Iran on Thursday.
“We concede that there will be a number of ships eager to leave the Gulf’s warm waters, and we think crude will struggle to find its footing amid a flurry of ‘open for business’ headlines, and yet we question the durability of the deal,” said analysts at RBC Capital Markets in a note to clients.
“In the event that the deal holds … the Hormuz reopening trajectory could resemble something similar to the Red Sea, where shipping traffic remains over 50% below pre-crisis levels despite the Houthis signing a deal in May 2025 to end hostilities.”
DOLLAR STRENGTH
The dollar index hit a new 13-month high, fuelled by a firm pledge from new Federal Reserve Chair Kevin Warsh to tackle inflation and ensure price stability. That has prompted traders to assume there will be at least one rate hike this year, compared with a negligible possibility a couple of weeks ago.
The shift in tone from the Fed has hit Treasuries hard. Two-year yields are nearly 10 basis points higher than they were this time last week, while benchmark 10-year yields have fallen 3 basis points to 4.451%.
That reflects investors pricing in the chances of near-term rate rises, while gaining some confidence that these could prove short-lived given the drop in the oil price.
The cash U.S. bonds market was closed on Friday for the Juneteenth holiday.
YEN ON THE BACK-FOOT
With the dollar in the ascendant, the yen stayed on the back-foot to trade around 161.3, leaving the U.S. currency at its strongest since last July, and well beyond the 160-threshold that most see as a trigger for Japanese intervention.
“Today’s U.S. holiday creates a lower-liquidity backdrop, a window during which Japanese authorities have previously shown a preference to intervene,” ING strategist Francesco Pesole said.
“A lack of intervention today would leave scope for speculators to push towards 162-163 given the supportive USD environment,” he said.
The pound was up 0.1% at $1.321, after a 0.7% drop the previous day as the Bank of England kept interest rates on hold in a 7-2 vote. Labour mayor Andy Burnham won an election in the north of England on Friday, removing a key obstacle to a leadership challenge against Prime Minister Keir Starmer.
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The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
