• Tehran says its missile and defensive capabilities will not be subject to negotiations with any foreign party.
• Iranian officials state that parties to the memorandum of understanding are first seeking to implement all of its provisions.
• The comments reduce the prospects of a near-term resumption of negotiations on Iran’s nuclear program.

Iran reaffirmed its red line on military issues on Tuesday, as markets continue to monitor geopolitical developments in the Middle East. According to Reuters, Iranian Foreign Ministry Spokesperson Esmaeil Baghaei said that Tehran’s missile and defensive capabilities would “not be subject to negotiations with any party.”

Baghaei also stated that the parties involved in the current memorandum of understanding are seeking to implement all of its clauses before opening new discussions on the nuclear issue.

The remarks suggest that Iran does not view an immediate resumption of nuclear negotiations as a priority until existing commitments are fully met.

Key takeaways

Iran's Baghaei says Tehran's missile and defensive capabilities won't be subject of negotiations with any party.
Iran's Baghaei says parties to MoU are trying to achieve all of its clauses before starting negotiations on nuclear issue.
Iran's Baghaei says concerned parties are trying to achieve all of MoU clauses before starting negotiations on nuclear issue.

Market reaction

Market reaction has remained limited following the comments. The US Dollar (USD) is trading firmer, with the US Dollar Index (DXY) rising 0.15% on Monday to around 101.15, while West Texas Intermediate (WTI) Crude Oil remains under pressure, down 0.90% on the day near $73.25 per barrel.