Good morning and welcome to FirstFT. In today’s newsletter:
Trump announces naval blockade of Strait of Hormuz
Orbán’s crushing Hungarian election defeat
Meta builds AI version of Mark Zuckerberg
Bolivia’s city of silver
Oil prices soared back above $100 a barrel this morning following the breakdown of US-Iran talks over the weekend and a plan by Donald Trump to blockade the Strait of Hormuz. Here’s the latest.
US blockade: The US announced it would launch a naval blockade in the Strait of Hormuz from 10am eastern time on Monday after Washington and Tehran failed to reach an agreement during talks in Islamabad over the weekend.
The marathon talks, the highest-level negotiations between the adversaries since the 1979 Islamic revolution, in the Pakistani capital broke up without agreement. US vice-president JD Vance, who led the American delegation, said Iran was unwilling to commit to never seeking a nuclear weapon.
Trump’s announcement of a naval blockade of Iranian ports is intended to put pressure on the regime in Tehran, which has continued shipping oil to key markets such as China during the conflict. But analysts warned a blockade could escalate the conflict.
Market reaction: Brent crude, the international benchmark, rose 7 per cent to $102, while West Texas Intermediate jumped 8.5 per cent to $104.82, as oil traders warned a prolonged conflict would worsen fuel shortages.
Stocks in Asia fell today and government bond yields surged higher. Shares in Europe started the week lower and the US dollar gained against a basket of currencies, including the euro and yen. US futures also slipped ahead of the start of trading on Wall Street.
“Blockading the strait supports higher oil prices for longer as it points to a more drawn-out war,” said Michael Alfaro, chief investment officer of Gallo Partners, an energy and industrials-focused hedge fund. Read the latest on our live blog.
Go deeper: The blockade is Trump’s latest attempt to change the dynamic of the Iran war. But will it work? James Politi in Washington, Andrew England in London and Najmeh Bozorgmehr in Tehran investigate.
Here’s what else we’re keeping tabs on today:
Global economy: The IMF and World Bank hold their spring meetings in Washington. The IMF is widely expected to downgrade its growth forecast for the global economy this week because of mounting costs linked to the war.
Results: Goldman Sachs kicks off reporting season for Wall Street banks. Here’s what to expect.
Africa: Pope Leo begins an 11-day apostolic tour of the continent, starting with a three-day visit to Algeria.
How worried should we be about the private credit market? Join expert FT journalists this Thursday for a subscriber-only webinar. Register now and send us your questions.
Five more top stories
1. Hungary’s Prime Minister Viktor Orbán has suffered a crushing defeat to the opposition Tisza party in parliamentary elections. The sweeping victory could have ramifications for the war in Ukraine and the EU more broadly. Orbán, the EU’s longest-serving prime minister, has been a champion of “illiberal democracy” and was a close ally of Donald Trump and Vladimir Putin. Read more on the result and what it means for Europe.
2. Exclusive: Meta is building an AI version of Mark Zuckerberg that can engage with employees in his stead. The chief executive is training and testing his own character as part of a wider push to develop “personal superintelligence”.
3. Donald Trump has accused Pope Leo of being “weak” on crime and “terrible” for foreign policy, in a scathing attack that underlines the rising tensions between the US president and the head of the Catholic Church. Chicago-born Pope Leo has become increasingly critical of Trump’s war in Iran and called the president’s threat last week to wipe out Iranian civilisation “truly unacceptable”.
4. China has said it will promote cross-strait flights, allow in Taiwanese TV dramas and facilitate sales of agricultural goods, after a rare meeting between Xi Jinping and the leader of Taiwan’s largest opposition party. Cheng Li-wun, head of Taiwan’s opposition Kuomintang, billed the trip as a “historic journey for peace”.
5. Western carmakers are betting on a niche technology that allows electric vehicles to travel further with a small engine as they try to fight back against Chinese rivals without destroying European supply chains. Read more on range-extended EVs.
Today’s big read
As the maker of Wegovy and Ozempic tries to step up efforts in the US, Novo Nordisk is looking to veterans from consumer goods giants such as Mars and Procter & Gamble to help the drugmaker catch up to rival Eli Lilly. But can the Danish industry stalwart transform itself enough to reverse its fortune?
We’re also reading . . .
King dollar: Those who seek regime change should be careful what they wish for, writes Eswar Prasad of Cornell University.
Breaking cover: What is the future of the business book? Andrew Hill shares how authors are rethinking the form.
Art market: Sotheby’s is offering sellers interest of 7 per cent to delay paying out their sale proceeds as it grapples with a cash squeeze.
Chart of the day
The expected arrival of chair nominee Kevin Warsh at the Federal Reserve looks likely to transform US monetary policy. Warsh has consistently stated a goal of shrinking the balance sheet and lowering the Fed’s influence or “footprint” in markets. Andrew Whiffin looks at the options available to the incoming Fed chair for shrinking the US central bank’s balance sheet.
Take a break from the news . . .
Potosí sits alone in Bolivia’s altiplano, but its vast mineral wealth once bankrolled the Spanish empire. Soaring commodity prices are drawing fresh interest to “the first city of capitalism”.
