UBS On-Air: Paul Donovan Daily Audio 'War and trade war costs'
6/2/20263 min
Another day, another round of Gulf war stories—the latest originated from semi-official Iranian sources, so markets took them more seriously. Iran’s apparent suspension of negotiations with the US prompted US President Trump to attempt a ceasefire between Israel and Hezbollah. Market opinions differ as to the terms and effectiveness of this.
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First 90 secondsPaul Donovan· Host0:01
Good morning. This is Paul Donovan, Chief Economist at UBS Global Wealth Management. It's seven o'clock in the morning London time on Tuesday, the second of June. The markets reacted to news around the Gulf War yesterday because the news came from the Iranian government, or rather, as close to the Iranian government as most news stories ever come. That is to say, via the semi-official press agency stories. Iran apparently stopped talking to the United States because of Israel's ongoing attacks in Lebanon. US President Trump then announced that Israel and Hezbollah had agreed not to fire at each other. Accounts differ as to the conversation Trump had with Israeli Prime Minister Netanyahu. Opinions differ as to whether Trump has any ability to influence the situation. The result was a relative drift higher in the oil price. Higher oil prices will affect farmers directly because running a tractor can be quite fuel-intensive and indirectly through things like fertilizer pricing. Trump has responded to these price pressures arising from the war by changing the price pressures arising from the trade war, cutting tariffs on imported agricultural equipment from twenty-five percent to fifteen percent. That will lower