World Awaits Iran's Response; Oil & Markets Reaction to Conflict
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today.

Karen, we begin with the latest developments in the Middle East. Israel is showing no sign of letting up while the world awaits Iran's response to the U.S. attack over the weekend. The extensive operation targeted nuclear sites at Fordow, Natanz and Ishbahan. It is still unclear how successful those strikes were in eliminating Iran's most heavily protected enrichment site at Fordow. Bloomberg News Israel Bureau Chief Ethan Bronner begins our global team coverage. They are

first of all, very eager to get clarity on what happened at Fordow. Did it really get destroyed? And I think we still don't fully know that. The initial indications are that these bunker busters did do a lot of damage, but, you know, the difference between a lot of damage and destruction can be a big deal.

Israel is continuing to attack in Western Iran. It is eager not only to eliminate or set back the nuclear program, but also its ballistic missile supply and ability to produce. You know, it's not over.

Prime Minister Netanyahu did say last night that they're not going to make this last a very long time, but they're not going to stop until they've achieved their goals. And that's Bloomberg News Israel Bureau Chief Ethan Brawner. Iran is vowing retaliation and is keeping up attacks on Israel. Bloomberg's Yamada Bersetchi continues our team coverage in Dubai.

What is certain is that they will have to respond somehow. And remember last week, the Supreme Leader, the Ayatollah, gave a televised speech where he said and he warned the U.S. that if they did participate militarily in Israel's air campaign against Iran, they would have no choice but to reciprocate and to cause, quote, irreversibility.

irrevocable damage. And so we are now in a situation where they will have to respond somehow. The question is whether they go for a targeted response, similar to what we got after the killing of Qasem Soleimani back in 2020, when they did actually attack a U.S. base in Iraq, but they telegraphed it to the U.S. beforehand. So it didn't lead to any fatalities at the time, but it was enough for them to save face and say that they had actually responded.

And that's Bloomberg's Yamada Persechi, who says the Islamic Revolutionary Guard Corps, which answers to the Iran's supreme leader, signaled U.S. military bases in the region could be targeted. And Karen, the U.S. strike has sparked a swift global response. U.N. Secretary General Antonio Guterres is coming out against the attack.

The bombing of Iranian nuclear facilities by the United States marks a perilous turn in a region that is already re-linked. Secretary General Guterres spoke at an emergency UN Security Council meeting. UK Prime Minister Keir Starmer is expressing support for the strike. We've long had concerns about the Iranian nuclear program and...

been very clear that Iran cannot have a nuclear weapon. The U.S. has now taken action to alleviate that threat. And now U.K. Prime Minister Keir Starmer is urging all sides to de-escalate. China issued a statement saying the use of bunker buster bombs will push the Iran-Israel conflict toward an uncontrollable state.

And Pakistan is criticizing the bombing as well. That country's prime minister met yesterday with Iran's President Massoud Pesachian. At the same time, Pakistan says it's nominating President Trump for the Nobel Peace Prize for helping to resolve its conflict with India last month. Nathan, Israeli Prime Minister Benjamin Netanyahu says the U.S. airstrike delivered a great deal of damage, but the full extent is not yet known. And Netanyahu praised President Trump. Congratulations, President Trump.

Your bold decision to target Iran's nuclear facilities with the awesome and righteous might of the United States will change history. Israeli Prime Minister Netanyahu made the comments in a pre-recorded news conference that aired last night. And following the attack, Karen President Trump's national security team fanned out on the Sunday political shows. Vice President J.D. Vance told NBC's Meet the Press the U.S. does not seek war with Iran.

We don't want a regime change. We do not want to protract this or build this out any more than it's already been built out. We want to end their nuclear program, and then we want to talk to the Iranians about a long-term settlement here. And Secretary of State Marco Rubio told CBS's Face the Nation that it would backfire on Iran and its allies if Iran were to block shipping through the Strait of Hormuz. The first people that should be angry about it are the Chinese government.

because they take a lot of their oil comes through there. So they should be the first ones that are saying if they mine the Straits of Hormuz, the Chinese are going to pay a huge price. And you can hear Face the Nation and meet the press every Sunday on Bloomberg Radio. Nathan, several airlines around the world are halting flights to the Persian Gulf, and we get the very latest with Bloomberg's Ewan Potts in London. Good morning, Ewan.

Karen and Nathan, British Airways and Singapore Airlines among the carriers cancelling fights to the Persian Gulf in the wake of those US strikes on Iran. According to Flightradar24, BA has dropped several flights to Dubai and diverted two other planes bound for the Emirates, including one which took off from Heathrow on Saturday, which was diverted to Zurich. Flights to Doha and Bahrain have also been cancelled.

Further afield, Air India and Japan Airlines have rebooted flights to avoid the Persian Gulf, adding to journey times for passengers. In London, I'm Ewan Potts, Bloomberg Radio.

Oil is also marginally higher, but well off the best levels. Global benchmark Brent initially surged as much as 5.7%. Right now it's up a tenth of a percent at $77.12 per barrel. Matt Gerken is chief geopolitical strategist at BCA Research. He says crude could go even higher.

If Hormuz is closed or if shipping in other ways is blocked or if Saudi Arabia is hit, those are last gasp actions by Iran. But if they happen, then of course we would start to move toward maybe even a doubling of oil price. I mean, definitely over 100 per barrel. That was BCA Research's Matt Gerken. And the news comes as Bloomberg data show two empty supertankers capable of transporting around 2 million barrels of crude U-turned in the Strait of Hormuz after the strikes.

Nathan, we are watching shares of Northern Trust this morning. They're up more than 5%. The Wall Street Journal is reporting Bank of New York Mellon approached the bank last week to express interest in a possible merger. Any tie-up would be significant in the banking world. Northern Trust is a market capitalization of more than $21 billion, while BNY's top $65 billion.

Turning to politics now, Karen, we are one day away from the Democratic mayoral primary election in New York City and some political heavyweights are weighing in on the contest as we hear now from Bloomberg's Lisa Mateo in Manhattan. Good morning, Lisa. Yeah, good morning, Nathan. So last night, the candidates, they attended campaign events across the city to try and lure undecided New Yorkers in early voting.

Former Governor Andrew Cuomo, well, he received a last-minute endorsement with the backing from former President Bill Clinton, who provided a taped robocall showing his support. He's a fighter who knows how to make government work. And at a time when our basic rights are under assault,

I know he'll stand up and protect the people of this city. Cuomo worked in the Clinton administration as the housing secretary. Now, experts say that move, well, it could help turn out older voters in the Democratic mayoral primary tomorrow. Meanwhile, State Attorney General Letitia James criticized Cuomo over harassment allegations at a rally in Brooklyn last night. Cuomo denies wrongdoing. He said he regretted leaving office.

By the end of early voting period last night, 384,000 Democrats had voted in the primary, nearly twice as many people that voted during the same period four years ago. Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company for Bloomberg Radio, has endorsed Cuomo for mayor. Lisa Mateo, Bloomberg Radio.

Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. Tens of millions of people across the Midwest and East will endure another sweltering day of dangerously hot temperatures as a June heat wave grips much of the U.S. Bloomberg meteorologist Craig Allen has the latest.

A large and expanding and intensifying heat dome covers the eastern half of the nation. There are nearly 30 states with some type of heat alert in effect right now. There is an extreme heat warning which affects 150 million people, especially in urban centers.

When we add the heat advisories, that's another 50 million people, so about 200 million people will be affected by this heat over the next 24 to 48 hours, if not longer. This is being called one of the most expansive heat alerts for so early in the season.

Bloomberg meteorologist Craig Allen. Mayor Eric Adams reminded residents that the severe heat kills hundreds every year in New York City. We are going to open our cooling centers. Please take advantage of it or stay with a loved one or family member who would have an air conditioner.

A federal judge in Tennessee plans to order the release of Kilmar Abrego Garcia. His deportation to El Salvador has become a flashpoint in President Trump's immigration crackdown while he awaits a federal trial on human smuggling charges. Abrego Garcia pleaded not guilty on June 13th to smuggling charges. His attorneys have characterized the charges as an attempt to justify his mistaken deportation in March to a notorious prison in El Salvador after the

fact. After more than three months in federal custody, Columbia University graduate and activist Mahmoud Khalil was released from a nice detention facility in Louisiana and returned to Newark, New Jersey. Yesterday, Khalil addressed supporters on the steps of St. John the Divine in Manhattan. Khalil recognized his fellow Columbia University students who are facing expulsion and other punishments. Columbia University will do everything to

and anything it can to ensure that the words free Palestine are not uttered anywhere near it. Khalil was joined by his wife in Manhattan. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen.

All right, Michael, thank you.

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Time now for the Bloomberg Sports Update brought to you by Flushing Bank. And we bring in John Stashower. John, good morning. Good morning, Karen. It was in 2008 that the Seattle Supersonics became the Oklahoma City Thunder. It seemed that just three years ago lost 58 games. This season they won 84 games. The second most in NBA history. The last of the 84. Game seven of the finals against Indiana. The Thunder have taken the NBA by storm for the first time

The NBA champion resides in Oklahoma City. The storybook season is complete. On ABC, OKC beat the Pacers 103-91. They won it in the third quarter when they outscored Indiana 34-20. Shea Gilgis-Alexander scored 29 points, the regular season MVP, also the finals MVP. The Pacers will always wonder what would have happened had Tyrese Halliburton not gone down with a serious Achilles injury just seven minutes of the game. His coach is Rick Carlisle.

He authored one of the great individual playoff runs in the history of the NBA. With dramatic play after dramatic play, it was just something that...

No one's ever seen. Halliburton had four game-winning shots against four different opponents. Earlier in the day, a big trade agreed to. Kevin Durant goes from Phoenix to Houston for two players and six draft picks. The Rockets will be KD's 15. Yankees, with three runs in the eighth inning, beat the Orioles 4-2. The Mets and David Peterson gave up two home runs in the Phillies' five-run fourth inning. The Phillies won 7-1. They're in first place as the Mets have lost 8-9. Red Sox lost to the Giants 9-5.

Nationals lost to the Dodgers 13-7. LSU won the College World Series for the eighth time. In Texas, Minji Lee won the women's PGA. It's her third major title. Keegan Bradley on the last hole of the Travelers near Hartford went from one shot behind to one ahead. And Bradley, the U.S. Ryder Cup captain, denied Tommy Fleetwood his first PGA victory. John Stanch, Bloomberg Sports, Karen Nathan.

All right, John, thank you. And this sports report brought to you by Flushing Bank. Life's more rewarding with Flushing Bank's complete cash rewards program for personal and business accounts. With 29 New York Metro locations, there's nothing more rewarding. Visit FlushingBank.com, member FDIC.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. The world and global markets are waiting for Iran's next move after the United States' unprecedented decision to strike Tehran's nuclear program with bunker-buster bombs over the weekend at three of its main locations.

underground enrichment facilities. And Israeli Prime Minister Benjamin Netanyahu is signaling no let up to his country's attacks. History will record that President Trump acted to deny the world's most dangerous regime, the world's most dangerous weapons.

It was Israeli Prime Minister Benjamin Netanyahu joining us this morning from Tel Aviv is Bloomberg News Israel Bureau Chief Ethan Bronner. Ethan, good morning. What more can you tell us about what's been happening between Israel and Iran since those U.S. strikes over the weekend?

Morning, Nathan. Well, the counterattack and attacks continue. Israel has been taking out, it says, launchers and missile storage sites. It has also attacked a bunch of airfields, military airfields, taken out some military planes on the ground in Israel.

in Iran. It is also over overflying and attacking in Tehran and the capital. And it recently, according to a recent report, just took another hit at Fordow, at that heavily fortified, rich, uranium enrichment center that the Americans dropped those 14 bunker busters on. So the Israelis have been continuing heavily. On this side, there was overnight a

just a single missile, but in the last hour or two, perhaps 15 or 20 damage apparently has been done to an electrical system in the south of the country. And every time these things come, millions of people go to their shelters and safe rooms. So it's really enormously disruptive.

and destructive. I mean, 10,000 Israelis are without homes as a result of these attacks.

We're all waiting to see whether or how Iran goes after U.S. assets in the Middle East. We haven't gotten any indication officially from Iran whether it's going that way. What is Israel bracing for? I mean, I think that Israel says it's bracing for everything. With regard to what Iran might do to the U.S., there was an assertion on Monday that the U.S. should await, quote, severe consequences. I think...

As we all know, it's sort of impossible for Iran to do nothing, given what the United States did yesterday, attacking so directly and so daringly. So I don't think that there will be nothing happening. I do think that they'll probably try to maintain pressure on Israel in particular.

But I find it hard to believe they won't do something against the U.S. Israel, you know, Israeli officials say, look, we've always been dealing with Iran and its proxies and what it does to us. So, you know, we're not any more afraid of retaliation than we were before. That's why we're carrying out this war.

We heard the praise from Israeli Prime Minister Netanyahu for President Trump and carrying out this attack over the weekend. At the same time, we've heard from Israel's President Isaac Herzog that they're not trying to bring the U.S. into its war with Iran. What is Israel's position when it comes to further U.S. action in the region?

So this is delicate. The Israeli official position is, you know, we are defending ourselves and we are not asking anyone to help us. But there is no question that this has been a goal for years of Israel to persuade the United States that to help

it fight off the Iranian nuclear and other threats is of interest not only to Israel but the United States and to the entire world. So what happened yesterday morning with the United States coming in has been almost a fantasy fulfilled for Israelis. I mean, the headlines today are quoting biblical passages about we'll be like dreamers in the promised land. Nobody can say enough of

of appreciation and of a sense of fulfillment that the United States took part in this in the way it did. And the way the president spoke about the threat from Iran in his speech afterwards was really could have been written only by a spokesman for Prime Minister Netanyahu, frankly. It was in the total embrace of an Israeli perspective. Yeah.

And in terms of that embrace, Ethan, is the sense that the goal for Israel is simply to take out the nuclear program? Is it regime change? Is that where this is going? Got about a minute left. Okay.

The Israelis have laid out three goals: eliminate nuclear, eliminate ballistic, and eliminate Iran's ability to arm and sponsor militias the way they've done in recent decades. Look, those things are very serious goals. Whether they can possibly be accomplished with that regime change is hard to know. They have not officially asserted regime change to be their goal. They would love it, of course.

All right. Appreciate this, Ethan, as always, leading our coverage of what's been happening in the Middle East throughout. That is Bloomberg News Israel Bureau Chief Ethan Bronner with us this morning from Tel Aviv. Karen. Well, Nathan, of course, we want to continue that coverage now and turn our attention to a conversation with former National Security Advisor John Bolton. He joined Tom Keene and Paul Sweeney on Bloomberg Surveillance's special coverage of the U.S. strikes on Iran to discuss Bolton's

America's move into the Middle East conflict and what will bring lasting security to the region. Let's listen in.

I can say unequivocally, I think President Trump made the right decision for America in attacking the Iranian nuclear program. We could have done it in the first term, too. I think the Hamas attack on Israel on October 7, 2023, which is part of the Iranian ring of fire strategy around Israel, obviously led us to this point, probably the worst mistake Iran has ever made. And I think Israel's decision to

To begin attacking the nuclear program itself last week is a significant reason why we're here now. But whatever the reason, it was the right thing to do. Let's remember this is day one. We now have to await the Iranian decision on how to retaliate. I think they'd make a big mistake if they did. Because I think whether it's Donald Trump or any other president, they would have to respond quickly.

forcefully. An emotional and delicate question. Can we succeed, Republicans, Democrats, Americans, can we succeed John Bolton in this process

without taking out the theocracy of Iran? I don't believe so. And I've thought that for many years. I think the only way to lasting peace and security in the Middle East is the overthrow of the Ayatollahs. I think the sanctions that were put in place when we withdrew from the badly flawed 2015 nuclear deal, when Trump withdrew in 2018, were the first step.

They call it the maximum pressure campaign. But maximum pressure is what Israel started last Thursday to take out the nuclear and ballistic missile programs. But the next step has to be regime change, because this regime is committed to ideological dominance within the Islamic world and hegemony in the Middle East. It poses a clear threat.

directly to the United States and many of our friends and allies. Well, then your study, either Bolton Hawk or a dove or whatever, do you see any template of success of regime change in the Levant, in the Middle East, in Libya for that matter?

Sure. I think there have been a number of successful efforts, and I think here the regime in Tehran is at its weakest point since 1979, since it came to power, for all kinds of reasons. As I indicated in the Wall Street Journal op-ed earlier this week, the people are very dissatisfied economically. The young people are dissatisfied. The ethnic groups are dissatisfied.

The women are dissatisfied after the Masi Amini murder two years ago. And I think they're looking, the people of Iran are looking at the devastation of Iran's terrorist proxies, the fall of the Assad regime in Syria, and now turning their nuclear and ballistic missile programs into ashes.

and saying what it all that do for the iranian people we spent untold billions of dollars over decades we've got nothing from it that that the regime is totally responsible for the people see the self-dealing and the corruption by the i told was in the top revolutionary guard officers i i think i think the sentiment is very negative on the regime there's been no outpouring of pro-regime sentiment

since Israel's attacks began. I'm not saying this is over with or going to be easy, but you've got a regime with an 85-year-old supreme leader who's ruled for 36 years with only one other supreme leader before him. It is a very dangerous, delicate position. Is it dangerous enough, John, that it can happen within organically, or do you think outside agents are needed, either

Israeli or American or even others? Well, I don't think there's any need for boots on the ground, but I think it's been a mistake for over 20 years not to aid the Iranian opposition inside Iran. It's very widespread, but it doesn't have centralized leadership, which is in a sense a good thing as well as a bad thing because the regime can't take it down. But helping coordination through communications or other resource assistance, of

across Iran, I think would be an entirely proper thing to do. John, how do you think President Trump came to that decision last evening? What changed? Because there certainly is a part of his base that really adheres to the America First movement.

uh, doctrine and this is anything but arguably. Well, but I remember what Trump said last week. He made it up and he decides what it is. And it just shows why it's not a philosophy in any convenient sense of that word. It's just what Trump wants to do. And I think Trump remembered very well in the 2016 presidential campaign, he made stopping Iran from getting nuclear weapons, the central part of that campaign. And if he had not followed through on it,

I think he would have had real political consequences to follow. So I think that's the biggest explanation. John Bolton, I believe Secretary Rubio is holding more than a few jobs. It's sort of like Paul Sweeney here at Bloomberg Radio. John Bolton, with these events, with the secretary standing behind the president last evening,

Do we have a State Department policy and diplomacy right now, or is it essentially off one desk at 1600 Pennsylvania Avenue? Well, I think it really is off that one desk. I think it's a mistake to combine the National Security Advisor and Secretary of State roles. No offense to Marco, for whom I have a lot of respect, but he's not Henry Kissinger. And I think that the coordination of policy in a complex, fast-moving relationship

region like the Middle East really needs two people to do what are more than full-time jobs as national security advisor and secretary of state. One person can just be overwhelmed by it. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen.

You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces.

And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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Easy Cater, your business tool for food. To learn more, visit easycater.com slash podcast.

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