And finally.... the US stock market had closed for the day. But there’s not much excitement on Wall Street.

The Dow Jones ended the day up a meagre 11 points, or 0.04% (squint and you miss it), while the S&P 500 and the Nasdaq fell around 0.2% each.

With the Iranian sanctions applied, investors are now hoping for a breakthrough in the US-China trade war later this week, when G20 leaders gather.

In the meantime, Trump’s accusation of incompetence at the Federal Reserve hasn’t dampened expectations of a Fed rate cut in July (if only to quieten the White House for a bit).

Goodnight! GW

Some experts are suggesting that America’s new sanctions on Iran’s supreme leader, Ayatollah Ali Khamenei, and eight senior military commanders are more symbolic than practical.

Here’s Bloomberg’s take:

The penalties won’t have a significant impact on a country that’s already in recession and facing heavy sanctions from the U.S. Still, the new restrictions serve as symbolic reprimand for the attacks, according to former Treasury officials.

“It will have an effect because it will annoy the Iranians and make negotiations hard to pull off if the supreme leader is sanctioned,” said Brian O’Toole, a senior fellow at the Atlantic Council who previously worked in the U.S. Treasury Department’s sanctions unit.

Donald Trump’s attack on the “stubborn, childish” Federal Reserve is weighing on the US dollar.

The greenback has dropped by 0.2% against a basket of currencies, nudging the euro up to $1.139.

Investors may feel the president’s criticism will force Fed policymakers to cut interest rates more than once in the coming months, to avoid further tweetblasts.

The oil price has dipped back in late trading - perhaps traders are relieved that America has only hit Iran with sanctions, not military action.

Brent crude (sourced from the North Sea) is down 0.9% at $64.64 per barrel). US crude is flat at $57.50 per barrel.

Here’s the executive order against Iran’s supreme leader, Ayatollah Ali Khamenei, and those in his office.

Plus the moment it was signed:

Wall Street is taking the new Iranian sanctions in its stride.

The Dow is still positive, up 48 points at 26,767 points, as New York traders grab lunch.

President Trump has now signed an executive order in the Oval Office that he said will deny Iran’s supreme leader and others access to financial instruments.

Trump told reporters:

“We do not seek conflict with Iran or any other country.

I can only tell you we cannot ever let Iran have a nuclear weapon.

The comes a few days after Iran shot down a US drone. The president played down the link, saying fresh sanctions were coming already, but added:

“I think a lot of restraint has been shown by us but that doesn’t mean we’re going to show it in the future.”

It’s official: America is imposing new sanctions on Iran, which target Tehran’s supreme leader, and top officials.

Mark Knoller of CBS has the details:

In the City, the FTSE 100 index of top blue-chip shares has closed just 9 points higher at 7,416.

It was a largely subdued day, with the weak German business confidence data hitting sentiment.

More (sceptical) reaction:

Donald Trump’s attack on the Federal Reserve today is just the “latest diatribe” in “long-running attack” against the central bank

So warns the Financial Times:

He has over the past year called the central bank his “biggest threat” and said he was “not even a little bit happy” with chairman Jay Powell.

Earlier this month, he said the Fed was being “very, very disruptive” by raising interest rates too fast and giving China an edge in trade negotiations as a result.

The criticism comes even after the Fed last week signalled a strong possibility of cutting rates this year and some central bank members argued for immediate action to cut them in order to counter weak growth momentum and inflation.

Britain and America’s stock markets remain “blandly positive this Monday despite Trump’s inflammatory remarks regarding both the Fed and the Strait of Hormuz”, comments Connor Campbell of City firm SpreadEx.

Donald Trump has also won a legal battle over his steel tariffs, although it’s not the end of the matter.

Supreme Court judges have turned down a challenge from US companies who said they were suffering higher prices and “ongoing harm” because of the tariff regime (which makes imports of steel more expensive).

Associated Press has the details:

The Supreme Court is rejecting an early challenge to President Donald Trump’s authority to impose tariffs on imported steel based on national security concerns.

The justices did not comment on Monday in leaving in place a decision by the Court of International Trade that ruled against steel importers and other users of imported steel who challenged the 25% tariff on steel that Trump imposed in 2018.

The importers argue that Trump does not have unbounded authority under the Constitution to regulate trade. They say that job belongs to Congress.

The legal challenge is at an early stage, before a federal appeals court has weighed in. The case could return to the Supreme Court later.

Donald Trump is right about one thing, though - this has been a vintage month for the stock market.

The Dow Jones is up nearly 8% this month, which the president called “one of the best” June’s in US history. It’s actually the best in over 80 years, since June 1938, when the Dow surged by an astonishing 24.3%.

This month’s rally follows a torrid May, and was sparked by suggestions of US interest rate cuts and fresh stimulus in the eurozone.

As Marketwatch puts it:

The rally for equities has been partly supported by the Fed, which concluded its Wednesday rate-setting meeting by signaling a willingness too trim rates as soon as the end of the July 30-31 gathering to curb the effects of tariff clashes between the U.S. and international trade partners, notably China, that have roiled global economies and threaten to disrupt global supply chains.

Donald Trump’s tweetstorm failed to address the fact that his trade dispute with China has been weighing on markets for some time.

Rupert Thompson, head of research at Kingswood, points out that investors are hoping for a breakthrough at the G20 meeting of world leaders on Friday and Saturday.

The meeting of Presidents Xi and Trump at the G20 gathering later this week will be critical.

Most likely, Trump will back away to some extent from the sharp increase in tariffs planned for early July. But a full-blown trade deal looks very unlikely. With equities riding high, the pressure on Trump to reach an early deal has been reduced.

In the meantime, hopes of US interest rate cuts are keeping markets buoyant, he adds.

One of the president’s top advisors, Kellyanne Conway, has been discussing Iran at the White House:

Does Donald Trump really want Chinese and Japanese warships cruising around the Persian Gulf? It’s only recently they were engaged in cat-and-mouse manoeuvres around the Senkaku Islands.....

Doug Saunders of the Globe and Mail points out that Japan’s navy isn’t allowed to head off into international action anyway.

The Atlantic’s David Frum also has concerns....

Bloomberg’s Stephen Stapczynski is querying the president’s math(s):

Donald Trump’s clampdown on Iranian oil seems to be having some success.

New figures show that Iran only exported 300,000 barrels per day this month, down from around 500,000 bpd in May. It had been shifting 2.5 million barrels per day last year, before the US sanctions kicked in.

European stock markets have subsided into the red, after a generally quiet morning.

The main indices are all down, as this morning’s drop in German business confidence worries traders.

AJ Bell investment director Russ Mould says investors are keeping their heads down until the G20 meeting later this week, where the presidents of China and the US will meet.

All the attention will be on Donald Trump and his Chinese counterpart Xi Jinping and whether they can dial down the mood music on trade which of late has been set at death metal levels.

“The outcome could help set the tone for the markets over the remainder of the summer.

Carsten Brzeski of ING has spotted that German business confidence has hit a four year low, according to this morning’s IFO report.

Business expectations have slumped, with company bosses expecting turbulence in the months ahead due to trade conflicts and a slowdown in America’s economy.

Brzeski writes:

Fear of losing. This is the best summary of the current state of Germany’s businesses. Germany’s most prominent leading indicator, the Ifo index, just dropped for the third month in a row, falling to the lowest level in more than four years. The Ifo index stood at 97.4 in June, from 97.9 in May.

While the current assessment component actually increased, the expectations component fell back, close to its recent low at the beginning of the year. Once again, it is well-known uncertainties that are weighing on German business sentiment.

Environmental news: health and beauty chain Boots is banning plastic bags at its UK stores.

Instead customers will get paper ones - at between 5p and 10p each, depending on size, as Boots joins the ranks of companies trying to restrict plastic waste.

This slump in German business confidence reinforces concerns that the global economy is faltering.

This is spurring a rally in government bonds, as the markets anticipate lower growth and weaker inflation.

The amount of sovereign debt trading above its face value is at record levels, suggesting investors are trying to protect capital rather than seeking earnings growth [Around $11 trillion of bonds are now on offer at negative yields, or interest rates]

It’s a worrying sign that a recession may be on the horizon, as the Wall Street Journal reports today:

The collapse in bond yields since this spring has been stark, swift and global, prompting a rush to lock in low rates that few expected to see this deep into a decadelong economic expansion.

But share price are also holding up, on hopes that central bankers will ease monetary policy and offer more ‘easy money’ to support growth, and asset prices.

This is an unusual situation -- typically, shares and bonds should move in opposite directions.

So, this correlation suggests markets are anticipating that central bankers will save the day again.

Mark Haefele, chief investment officer at UBS Global Wealth Management, say this may not happen.

Bond markets appear to be signaling an economic slowdown, while equities suggest growth will continue in a low-inflation, “Goldilocks” scenario.

These seemingly contradictory stories only make sense if the bond market is pricing preemptive Fed rate cuts and the equity market is pricing that this action will succeed in preventing a slowdown. Since 2009, the Fed has proven generally successful at pivoting the right way, but we are wary of positioning for perfection.

Here’s Associated Press’ take on the decline in German business morale:

A closely watched survey is showing that German business confidence has fallen to a near five-year low as managers’ expectations for the coming six months have deteriorated.

The Ifo institute said Monday that its monthly confidence index slipped to 97.4 points in June from 97.9 last month, in line with market expectations.

The third straight monthly fall takes the index to its lowest since November 2014 and was entirely due to managers’ waning views of future prospects.

Their assessment of the current situation rose modestly from May.

German growth forecasts have been cut repeatedly recently and the economy is expected to turn in a feeble performance in the second quarter after returning to growth in the winter.

Ifo’s survey is based on responses from some 9,000 firms.

German business confidence has now fallen steadily since May, as this chart from IFO shows:

However... Germany’s stock market is underperforming the rest of Europe, down around 0.25%.

Carmakers are dragging the DAX index down, after Daimler (-3.7%) hit shareholders with a profits warning. Daimler expects earnings to be hundreds of millions of euros below forecasts, due to the long-running damage from the diesel emissions scandal.

It’s the third profits warning from Daimler, which produces Mercedes-Benz vehicles, this year.

European stock markets are creeping higher in early trading, with US-Iranian tensions lingering.

The FTSE 100 is up 12 points, with insurance group Admiral (+3%) leading the risers after a broker upgrade. JD Sports (+2.9%) is also making the early running.

Craig Erlam of trading firm OANDA also believes Facebook’s Libra is giving bitcoin a boost:

The publicity that the [Libra] launch has once again brought to the space combined with the legitimacy is offers has understandably excited the community and we’ve seen before that you don’t get a normal response when this happens.

Whether it actually endorses something like bitcoin or not is perhaps not that important right now, particularly to those that have never lost the faith. It late 2017 is anything to go by, the coming weeks could be a wild ride.