[International Finance Briefing] Iran Warns of Broad Retaliation Against Further U.S. Provocations; Probability of December Rate Hike at 72%

Iran has warned of a "far more extensive" retaliation than before if the United States takes further provocative action, a threat that has heightened alarm across Middle Eastern nations, according to a report by the International Financial Center on the 2nd. The warning comes as President Trump weighs resuming powerful strikes against Iran, with multiple Middle Eastern countries expressing serious concern (Bloomberg). Qatar-mediated negotiations between Tehran and Washington have continued but have not reached a final agreement, though Pakistan has voiced cautious optimism about the prospects of a deal. On the monetary front, expectations of a December rate hike have strengthened ahead of the U.S. midterm elections and upcoming jobs data, with markets pricing in a 72% probability of an increase. Traders should watch upcoming U.S. employment figures and any escalation in U.S.-Iran tensions, both of which could move risk assets and rate expectations.