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DUBAI — Iran will surpass the internationally agreed limit on its low-enriched uranium stockpiles in 10 days, the country’s atomic energy body said Monday.

A spokesperson for the Iranian Atomic Energy Organization said that the country would increase enrichment levels to 20% — significantly closer to weapons-grade material — for use in local reactors, but emphasized that Europe still had a chance to rescue the 2015 nuclear deal if its remaining signatories found a way to shield the Islamic Republic from the crippling effect of U.S. economic sanctions.

“We have quadrupled the rate of enrichment and even increased it more recently, so that in 10 days it will bypass the 300 kilogram limit,” Iran’s Atomic Energy Organization spokesman Behrouz Kamalvandi said on state TV, as quoted by Reuters. “There is still time … if European countries act.”

Iran would be exceeding its internationally-agreed enrichment cap of 3.67%, which is the amount allowed for civilian nuclear power development. Weapons-grade enrichment is 90%, but according to nuclear experts, reaching 3 to 4% enrichment equates to roughly two-thirds of the work done toward that 90% figure, as any increases beyond that seemingly small amount disproportionately speeds up breakout time.

Tehran is threatening to roll back its obligations under the nuclear deal a year after the Trump administration withdrew from it and reimposed punishing sanctions on the Iranian economy, most significantly its oil sector, the country’s largest source of revenue.

The nuclear agreement, officially known as the Joint Comprehensive Plan of Action (JCPOA), was meant to offer Iran financial relief from sanctions in exchange for curbs to its nuclear program and was signed under the Obama administration along with the U.S., France, Germany, the U.K., Russia and China.

The deal’s non-U.S. signatories opposed the Trump administration’s withdrawal and have pledged to keep the deal alive, even going so far as creating a special-purpose vehicle that could facilitate trade with Iran while skirting U.S. secondary sanctions.

Iran’s Atomic Energy Organization spokesman said Monday that European leaders needed to “act, not talk.”

Hurtling toward conflict?

The last several weeks have also seen drone attacks on oil infrastructure and an airport in Saudi Arabia claimed by Yemen’s Houthi rebels, who are supported by Iran.

A rapid escalation in tensions has stoked fears of impending conflict between the U.S. and its Gulf allies and the Islamic Republic, though both sides say they don’t want war. Washington has ramped up its military presence in the region, with additional aircraft carriers, bomber tank forces and planned deployments of thousands more troops. A slight miscalculation or miscommunication, many believe, could risk sparking all-out conflict.

European leaders react

The U.K. government reacted to Iran’s announcement Monday, warning that it would consider “all options” in response to a breach of the 2015 deal.

“We have been clear about our concern at Iranian plans to reduce compliance with the JCPOA,” a spokesman for U.K. Prime Minister Theresa May said. “Should Iran cease meeting its nuclear commitments, we would then look at all options available to us.”

A German Foreign Ministry spokeswoman urged Iranian leaders to uphold the deal.

European foreign ministers have been urging restraint and have not yet made their conclusions as to who was behind the tanker attacks of the previous week, though U.K. Foreign Minister Jeremy Hunt said last week that Iran’s military was “almost certainly” responsible.

Iranian President Hassan Rouhani, meeting with France’s new ambassador to Iran in Tehran, said, “The current situation is very critical and France and the other parties to the (deal) still have a very limited opportunity to play their historic role for saving the deal.”

“There is no doubt that the collapse of the (agreement) will not be beneficial for Iran, France, the region and the world.”

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US, China expected to hold in-person trade talks next week

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US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He at the Diaoyutai State Guesthouse in Beijing on Feb. 15, 2019

Mark Schiefelbein | AFP | Getty Images

American trade negotiators will soon head to China for face-to-face talks as the world’s two largest economies try to strike a deal, sources told CNBC.

The U.S. officials will travel to China for discussions sometime between Friday and Thursday, August 1. The discussions will continue renewed engagement between the sides as they try to end a potentially damaging trade war. 

White House officials are eyeing a longer-term timeline to strike a deal with China, two people who have met with White House principals in the last day said. It may take roughly six months to reach an agreement. 

In the meantime, the administration could shift its focus to ratifying the United States-Mexico-Canada Agreement. President Donald Trump sees approving his replacement for the North American Free Trade Agreement as a major economic and political priority. 

Investors have watched the China talks closely. A widening trade war between Washington and Beijing would risk more damage to American companies and the global economy. 

The Trump administration has put tariffs on $250 billion in Chinese goods — and threatened to put duties on even more products. Beijing has slapped tariffs on $110 billion in American goods. 

Both the U.S. and China have taken steps to deescalate tension in recent days. Trump agreed to make “timely” decisions about whether to allow American tech companies to sell to blacklisted Chinese firm Huawei. 

Meanwhile, Chinese state media reported that China had taken steps to start following through on its promise to buy more U.S. agricultural goods. Trump sees the step as important to reaching an agreement as American farmers take a hit from tariffs on crops. 

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UBS earnings Q2 2019

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UBS announced a net profit of $1.4 billion for the second quarter of 2019. This compared to a net profit of 1.28 billion Swiss francs ($1.29 billion) in the second quarter of 2018.

The Swiss-lender announced that this is the highest second-quarter net profit since 2010. The profit boost comes in despite declines in both its investment bank and wealth management divisions.

Here are some key highlights for the quarter:

  • Operating income hit $7.5 billion versus $7.6 billion a year ago
  • Return on tangible equity stood at 11.9% versus 12% a year ago
  • Common equity tier 1 capital ratio of 13.3% versus 13.4% a year ago

“We saw a normalization of the environment coming out of a good March into the rest of the quarter. I’d say the highlights were clearly: diversification paid off again,” Sergio Ermotti, chief executive officer of UBS told CNBC’s Joumanna Bercetche.

UBS shares hovered around the flatline shortly after the market open.

Global Wealth Management down

UBS, however, saw a decline in its global wealth management business compared to a year ago. The bank reported an operating profit of $886 million compared to over $1 billion in the second quarter of 2018.

Profits in its investment bank division also fell from a year ago. It registered an operating profit of $440 million in the second quarter for this year compared to $571 million a year ago.

Speaking to CNBC, Ermotti explained that “the u-turn in the interest rate environment in the U.S. has created pressure.”

Market expectations point to an interest rate cut by the Federal Reserve later this month. The central bank had embarked on a normalization path in 2015, after the global and sovereign debt crises. However, recent data has shown worsening economic conditions in the U.S.

In Europe, the outlook is similar for monetary policy. The European Central Bank (ECB) said in May that if incoming economic data does not show an improvement, then the central bank will be prepared to announce more stimulus.

Ermotti told CNBC that he is not sure whether further easing will propel the economy. “I’m not sure going deeper into negative territory or using the QE (quantitative easing) is the way to get out of the problems…We need more structural answers,” he said.

Ermotti warned “there are severe broader considerations than just the banking industry” from low rates.

Outlook

Ermotti’s comments come in after the Swiss-lender warned in its latest results that a return to monetary stimulus from various central banks could dent profits going forward. “A sharp drop in interest rates and expected rate cuts will continue to adversely affect net interest income compared with last year,” UBS said.

However, the Swiss bank expects that a diversified business, stronger investor sentiment and higher market volatility will help offsetting impacts from changes to monetary policy.

In the previous quarter, UBS had announced that cutting an extra $300 million from its 2019 costs after anticipating the fall in revenues.

“We constantly look at ways from a structural and tactical point of view, and the 300 million were pretty much tactical. We always think constantly on how to optimize our cost base but at the same time we are investing in the future,” Ermotti said Tuesday.

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Q2 net profit falls 18% amid Popular costs

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Santander said on Tuesday second-quarter net profit fell 18% from a year earlier, due to one-off restructuring costs from its acquisition of troubled lender Banco Popular and a weak performance in Britain.

The euro zone’s largest bank in terms of market cap — which took over Banco Popular in June 2017 — reported a net profit of 1.39 billion euros ($1.56 billion) for the April to June period, topping analysts’ expectation of 1.29 billion euros in a Reuters poll.

Steady growth in Latin America business volumes, where it makes 46% of its earnings, was not enough to offset charges of 706 million euros, mainly in Spain.

Like its European rivals, Santander is struggling to lift earnings from loans in its home market with interest rates hovering at historic lows.

“We have delivered the strongest underlying quarterly performance in over 8 years, reflecting the progress that we have made in our commercial and digital transformation,” Jose Garcia Cantera, chief financial officer of Santander, told CNBC’s “Squawk Box Europe.”

“Our businesses in both North and South America continue to perform extremely well and while the charges relating to ongoing infrastructure in Europe have impacted attributable profit — something that we anticipated — we are already starting to see the value that this will create going forward,” Cantera said.

Net interest income, a measure of earnings on loans minus deposit costs, was 8.95 billion euros, up 5.6% from the second quarter of last year and 3.1% higher against the previous quarter due to a solid lending growth in Latin America.

Analysts had forecast a NII of 8.76 billion euros. 

In Britain, its third-largest region, profit fell 41%, partly due to restructuring costs of 26 million euros and provisions of 80 million euros.

Santander ended the quarter with a core Tier-1 capital ratio, a closely watched measure of a bank’s strength, of 11.3%, compared with 11.23% in the previous quarter.

Shares of the bank were up over 2% shortly after the opening bell.

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