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Fingers pointed over the Saudi oil facility attack, U.S.-China trade talks set to resume and Singapore plans to woo more FX electronic trading platforms. Here are some of the things people in markets are talking about today. 

Saudi Attack

Saudi Arabia said Iranian weapons were used in the attack on one of its key oil installations, but stopped short of directly blaming the Islamic Republic for the strikes that cut its crude output by half and rattled oil markets. Ongoing investigations of “debris and wreckage” at the giant Abqaiq crude-processing complex show “it belongs to the Iranian regime,” Turki al-Maliki, a spokesman for the Saudi-led coalition in Yemen, told reporters in Riyadh. U.S. Secretary of State Mike Pompeo has blamed Iran, while Iranian President Hassan Rouhani said the attack was the result of a years-long war that Saudi Arabia has waged on Yemen. Trump said in a tweet over the weekend that the U.S. has “reason to believe that we know the culprit” and is “locked and loaded,” raising bipartisan alarm. These photos show how the air attack crippled Saudi Arabia’s output. 

Markets Tested

Developments in the Middle East are testing sentiment after a bullish start to the month for global equities and other riskier assets. Asian stocks look set for a muted open Tuesday as investors assess heightened geopolitical risks in the aftermath of the Saudi Arabia strike. U.S. stocks slipped on Monday and the dollar jumped against peers. Oil surged amid pessimism that there will be a rapid recovery in  oil production from the weekend’s attack. It may be weeks or months before the majority of output is restored at the Abqaiq processing plant. Elsewhere, the pound retreated after no signs of progress in Prime Minister Boris Johnson’s first face-to-face meeting on Brexit with European Commission President Jean-Claude Juncker.

More Trade Talks

Chinese and American senior trade negotiators are expected to resume talks in the next week and a half, while lower-level officials are expected to meet next Friday, U.S. Chamber of Commerce Chief Executive Officer Thomas Donohue said. U.S. Trade Representative Robert Lighthizer indicated there’s some movement on China buying U.S. farming products and other issues, Donohue said, but it’s “an extraordinary challenge” to get a complete deal and much work remains to be done. Both sides have taken steps to show goodwill recently, and U.S. officials are considering an interim deal to delay tariffs with China, people familiar with the matter told Bloomberg.

‘Criminal Enterprise’ 

A criminal enterprise operating inside JPMorgan for nearly a decade. That’s how U.S. prosecutors described the bank’s precious metals trading desk on Monday, when three traders were charged with price rigging. The head of JPMorgan’s global precious metals desk and two others ripped off market participants and clients as they illegally moved prices for gold, silver, platinum and palladium, the Justice Department said, invoking the Racketeer Influenced and Corrupt Organizations Act – a law more commonly used against organized crime rings than major banks. Its use suggests that JPMorgan may face deeper legal jeopardy, going beyond the several individuals who have already been prosecuted. 

Singapore vs. Hong Kong

Singapore plans to attract more companies that will set up electronic trading platforms. In the battle to be Asia’s biggest foreign-exchange currency hub, the city-state still has a lead over Hong Kong, but only just: Average daily trading in Singapore jumped to a record $633 billion in April, while Hong Kong saw $632 billion in transactions. UBS, Citigroup, Standard Chartered and JPMorgan have all set up FX pricing and trading engines in Singapore over the past year. But another three to five major players are needed to achieve “critical mass,” says Benny Chey of the Monetary Authority of Singapore. “We have confidence that we’ll get those players as we’re already in discussions with them,” Chey said in an interview, without disclosing names. 

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

  • Trump says the U.S. and Japan have reached an initial trade agreement. 
  • A $45 billion bet on Modi’s India is rapidly unwinding. 
  • Trump says he “probably” won’t go to Pyongyang. 
  • Why the dominant U.S. dollar refuses to go away.
  • Singapore halts sales of some stomach acid drugs due to cancer worries.
  • Jacinda Ardern is under scrutiny over the handling of a sexual assault allegation.
  • Oxycontin maker Purdue Pharma may face a stiff fight in bankruptcy.
  • Boris Johnson says Brexit talks are at a “difficult moment.”

To contact the author of this story: Alyssa McDonald in Sydney at amcdonald61@bloomberg.net

To contact the editor responsible for this story: Alex Millson at amillson@bloomberg.net

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