Iran Plan

The U.S. will impose major new sanctionson Iran Monday, days after President Donald Trump abruptly called off airstrikes against the Islamic Republic. Trump told reporters that military action is “always on the table until we get this solved” and that if Iran’s leadership “behaves badly, it’s going to be a very bad day for them.” The Washington Post reported the president approved a cyber attack on Iran’s missile systems. Despite the hard line, Trump said he’s prepared to hold talks with Iranian leaders with no preconditions, repeating an offer made previously by his administration. The president told NBC that the proposed discussions have “nothing to do with oil” or shipments through the Strait of Hormuz but with preventing Iran from getting nuclear weapons.

Erdogan Blow

Turkish opposition candidate Ekrem Imamoglu decisively won the redo of the Istanbul mayor’s race on Sunday, in a stinging indictment of President Recep Tayyip Erdogan’s economic policies and his refusal to accept an earlier defeat. Imamoglu, backed by opposition parties including CHP, won 54% of the vote, and the ruling AK Party’s candidate, former Prime Minister Binali Yildirim, captured 45%, according to state media. The political upstart broadened his margin of victory to nearly 800,000 votes from 14,000 in the March 31 balloting, in a clear sign voters are concerned about Turkey’s democratic foundations and an economy reeling from a spike in consumer prices and unemployment.

China Resistance

China has the strength and patience to withstand the trade war, and will fight “to the end” if the U.S. persists with it, the country’s state-run People’s Daily said in an editorial Saturday. The U.S. must drop all tariffs imposed on China if it wants to negotiate on trade, and only an equal dialogue can resolve the issue and lead to a win-win, the newspaper said. The paper, a mouthpiece for China’s ruling Communist Party, said the U.S. had failed to take into account the interests of its own people, and they are paying higher costs due to the trade dispute. “Wielding a big stick of tariffs” also disregards the condition of the U.S. economy and the international economic order, according to the editorial.

Markets Wrap

Asian stocks looked set for a mixed start to the week amid signs the recent global rally may be running out of steam for the moment. Oil climbed as the U.S. said it was planning sanctions on Iran. Futures in Japan pointed modestly lower, while Hong Kong contracts were little changed. S&P 500 futures opened steady after the gauge edged down Friday, pulling back from its all-time high reached in the previous session. The yen and the offshore yuan were little changed. The yield on 10-year Treasuries ended last week at 2.05%. The Turkish lira surged after the opposition candidate won the redo of Istanbul’s mayoral race.

Boris Scrutiny

Boris Johnson faced fresh pressure in his bid to become U.K. prime minister amid calls for him to answer questions about a spat with his partner that brought the police to his London home and signs he may be losing some wider public support. Johnson needs to show that he is willing to answer difficult questions, his rival Jeremy Hunt said in a Sky News interview Sunday, a day after the pair made their opening appeals to grass-roots Conservative Party members at a political roadshow that focused attention on the front runner’s character. His comments were echoed by International Trade Secretary Liam Fox, a Hunt supporter