Iran’s Assembly of Experts elected Ayatollah Ali Khamenei’s 56-year-old son Mojtaba Khamenei as Iran’s new supreme leader, signaling Iran is not backing down from the accelerating Middle East conflict. President Trump quickly criticized the choice, following Sunday’s Israel’s IDF post on X (in Farsi) threatening to “target” anyone who succeeds or attempts to appoint a Khamenei successor.
Sunday’s developments followed President Trump’s Friday demand for Iran’s “unconditional surrender.” Trump commented, “At some point, I don’t think there will be anyone left maybe to say, ‘We surrender.’” On Sunday, Trump floated the option of deploying U.S. special operations forces on the ground to seize Iran’s near-weapons-grade enriched uranium supplies.
On Monday morning, Saudi Arabia joined UAE, Kuwait and Iraq in preemptively cutting oil production as domestic storage capacities dwindle amid near-blockage of the critical Strait of Hormuz. Arab producers around the Persian Gulf have roughly 300M barrels of total storage capacity, of which 65% is already filled. Because operational considerations generally prohibit usage above 80% of nameplate levels, risks are rising for complete shutdowns of portions .of Persian Gulf output.
Overnight, April WTI futures touched $119.48 (+31.4% d/d and +60.0% from Wed. close) and Brent futures touched $119.50 (+ 28.9% d/d and +46.8% from Wed.). President Trump stated $100 oil is a “small price to pay” and the cost “will drop rapidly when the destruction of the Iran nuclear threat is over.”
China’s PBOC increased its gold reserves in February for the 16th consecutive month, adding 30koz to increase total holdings to 74.22Moz (up 1.42Moz since Nov. ’24). Separately, WGC reports global central banks purchased a net 5 tonnes in January (vs. 12-mos. avg. 27t) as volatility and holiday season weighed on purchases. Russia and Venezuela have sold gold in recent months, while Central Bank Chief Adam Glapinski proposed sale of $13B of the Poland’s gold reserves to help finance President Karol Nawrocki’s accelerated defense spending program.
U.S. February payrolls fell 92k (vs. +55k est.) with 2-month revisions -69k. Three of past 5 months have been negative prints with 5-mos. avg. -16.4k. Unemployment rate increased 10bpts to 4.4%, although that would have been worse had the participation rate not fallen to 62% (from downwardly revised 62.1%).European bonds trading lower with yields +4bps-8bps (U.K. +11.4 bps), 10-year Treasury yield +2.9% (4.167%). Euro Stoxx 50 -1.7%, S&P futures -1.1% and Nasdaq futures -1.2%. DXY dollar index +0.3%, spot gold -1.5% and spot silver -1.4%. WTI +11.6% ($102.40) and Brent +11.6% ($104.32). (8 am ET).
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