Evening Brief, Monday 3 August

Donald Trump said he halted a prepared military strike on Iran after Gulf allies urged restraint and after what he described as signals from Tehran. He called the planned operation the biggest since the second world war, then said talks would begin on Monday afternoon. The White House offered few details on venue, participants or timing, which left diplomats and traders to guess how much was theatre and how much was a channel.

Iran pushed back quickly. Foreign ministry spokesman Esmaeil Baghaei said Tehran was not negotiating with Washington and was instead talking with Oman about safe navigation through the Strait of Hormuz. That distinction matters because about a fifth of traded oil and natural gas used the strait before the war, and recent tanker attacks have made shipowners wary of entering the Gulf.

Oil prices treated Trump's turn as good news, not a settlement. Brent and West Texas Intermediate fell sharply on Monday, while European shares and Gulf markets edged higher as investors removed part of the war premium. OPEC+ also approved an output-quota increase of about 188,000 barrels a day from September, though disrupted Gulf exports mean paper barrels may not arrive as real supply.

The next move will show whether Trump has opened a door or merely stepped back from it; markets can price relief in minutes, but the Strait of Hormuz needs ships, insurers and Iran to believe the same story.

Spain's Ceuta crisis shifted from emergency response to European blame-trading after Ceuta's government raised its count of bodies recovered near the Tarajal breakwater to 88 on Monday, above the 72 the central government's delegation had given on Sunday, with 11 more deaths reported on the Moroccan side. Hundreds of migrants remained on El Trampolín beach on Monday, while Ceuta's president Juan Jesús Vivas said 3,000 to 5,000 people were still in the enclave. Madrid said about 69,500 had returned to Morocco over four days, a figure that exceeds the first estimate of arrivals and captures the confusion of the surge.

Local police unions said the border force was overwhelmed when thousands of people crossed from Morocco, many by swimming around the breakwater or using makeshift flotation devices. Spain installed a 500-metre floating barrier at Tarajal beach after the crossings slowed, and shops in the enclave began reopening only cautiously as residents tried to measure what normal now means.

The EU argument hardened faster than the humanitarian one. Italy and Denmark rallied 22 governments behind a letter demanding tougher external-border controls, faster returns and action against what they called pull factors, including Spain's recent regularisation plans and a court ruling that restricts immediate sea returns. Pedro Sánchez accused partners of selfish and illegal politics, while France defended Schengen cooperation with Spain.

The Tuesday interior-ministers' call will test whether the EU can turn shock into procedure before national leaders turn it into campaign material.

Spokane spent Monday counting homes and hoping not to count bodies after three fires merged and raced into the city under hard winds. More than 65,000 residents were ordered to evacuate, about 700 buildings were destroyed and the combined complex had burned more than 7,700 acres, still with zero containment on Monday morning. Crews from more than a dozen states and Australia joined firefighters, while more than 100 National Guard members helped manage the evacuation and smoke left air quality at very unhealthy levels.

Greece added a different kind of fire tragedy. Two firefighting helicopters collided near Psatha, northwest of Athens, killing a Greek coordinator and a Danish pilot while they fought one of more than 200 fires reported across the country in the past week. The Attica and Boeotia regions have lost more than 27,000 acres, and officials said strong winds and turbulence at times kept aircraft from taking water or making accurate drops.

Heat alerts widened the map. Spain warned of 40°C in parts of Galicia and Castilla-La Mancha, while Germany placed almost the entire country under heat warnings and forecast up to 39°C with severe thunderstorms pushing in from the southwest. Belgium also issued an orange alert as the hottest day of its spell arrived.

This is the hard arithmetic of summer now: fire crews, hospitals, grids and households all draw from the same thin reserve of stamina.

Hungary's only nuclear plant approached a first full shutdown in its 44 years as the Danube fell to a record low. The Paks gauge touched the plant's minus 134 centimetre shutdown threshold on Sunday afternoon, having read minus 133 centimetres earlier that day, and the plant's built-in emergency cooling is designed to keep working down to minus 144 centimetres. Paks normally supplies about 2,000 megawatts, roughly half Hungary's electricity, but by Monday it was producing only 240 megawatts from a single turbine.

Peter Magyar's government has tried to turn conservation into capacity. It banned electric freight trains during the 17:00 to 22:00 peak, ordered shopping centres to curb air conditioning and told cities to switch off decorative lighting. Voluntary cuts by households and companies saved about 700 megawatts on Sunday, while large industrial users face mandatory reductions if the grid tightens further.

The river's fall is already regional. Serbia's Djerdap hydropower plants are running at a fraction of capacity, Romania has taken both Cernavodă nuclear units off the grid and Polish utilities reported that heat and low river levels were forcing cuts at some conventional units, while grid operator PSE said the system could still cover demand. The heatwave lifts demand at the same time as water removes supply, which is exactly the pairing power planners dread.

Nuclear plants look immovable until the river beside them moves away; Central Europe is discovering that baseload power also has a waterline.

AstraZeneca shares fell about 8% after reports that it had held preliminary merger talks with Bristol Myers Squibb, while Bristol Myers rose as much as 6%. A tie-up would create a pharmaceutical group with a combined market value near $400 billion, but investors struggled to see why Pascal Soriot's company should buy a rival facing a heavy patent cliff. AstraZeneca has a fast-growing cancer franchise and a 2030 revenue target of $80 billion, so shareholders want more than size for size's sake.

France moved in the opposite direction, tightening the state gate before capital can enter. A new decree lowers the approval threshold to 10% for non-European investors buying into listed French companies in sensitive sectors, including French firms quoted outside the EU. The rule covers defence, cybersecurity, artificial intelligence, semiconductors, quantum technology, energy, healthcare and critical raw materials, and gives the finance ministry ten days to decide whether to launch a deeper review.

Liechtenstein then showed the reputational cost of transparency infrastructure that fails. Hackers copied data tied to about 31,000 legal entities from its beneficial-ownership register, the very system built to help the principality shed its old tax-haven image. Officials said no ransom demand had arrived and no bank-client data had been hit, but privacy is an asset there, not a footnote.

The market lesson is blunt: companies may still chase scale, but governments and hackers increasingly decide which balance sheets feel safe.