Welcome to Monday, it's Carmeli here in Sydney with all the latest news you need to start your week.

Today’s must-reads:
• US strikes Iran’s nuclear sites
• Australia calls for de-escalation
• Australia’s defense spending

What's happening now

The US joined Israel in its war against Iran, carrying out airstrikes on three nuclear sites over the weekend despite President Donald Trump’s longtime promises to avoid new foreign conflicts. Trump said Iran’s key nuclear enrichment facilities had been “totally obliterated” and warned of “far greater” attacks unless the Islamic Republic agreed to make peace.

Australia’s government called for de-escalation, dialog and diplomacy in a statement that also said Iran’s nuclear and ballistic missile program has been a threat to international peace and security. Opposition home affairs spokesperson Andrew Hastie said the government’s position has been “far too ambiguous” and urged it to support the US action.

Australia’s deputy prime minister said the nation will base defense spending on national interest, amid calls by Trump for US Indo-Pacific allies to increase military budgets. Richard Marles, also Australia’s defense minister, will join NATO leaders for meetings in the coming week at the Hague.

The last remaining bearish analyst covering Qantas Airways is defying the stock’s record rally, warning that the airline may yet be undone by a A$20 billion ($13 billion) bill to replace its aging fleet. Morningstar’s Angus Hewitt has the only sell rating on Qantas among 16 analysts tracked by Bloomberg, and argues that one of the airline’s biggest risks is in its planned fleet overhaul.

What happened overnight

Here’s what my colleague, market strategist Mike “Willo” Wilson says happened while we were sleeping…

The dollar rose in pre-Asia trading in response to US air-strikes on Iranian nuclear sites. Gains held as markets await a response which may include closure of the Strait of Hormuz, an oil choke point. Oil futures jumped 4.5% on this possibility. US stocks ended little changed on Friday but futures fell 0.6% on today’s open, dragging the ASX September contract lower. This morning, Aussie and kiwi have taken losses into a third day as risk appetites get sapped. Australian monthly CPI and New Zealand consumer confidence are the calendar highlights this week.

US strikes on Iran’s three main nuclear facilities come at a fragile moment for the global economy, and the outlook now hinges on how forcefully the Islamic Republic retaliates. Meanwhile, Iran’s leaders are discovering they’re on their own against the US and Israel, without the network of proxies and allies that allowed them to project power in the Middle East and beyond.

Ayatollah Ali Khamenei delivers a televised address in this handout photo release by the Office of the Iranian Surpeme Leader on June 18. Photographer: Office of the Iranian Supreme Leader/AP Photo

Oil traders are preparing for an oil-price surge when trading reopens, with the focus on whether Tehran’s retaliation to US airstrikes will lead to a disruption in crude flows that have been largely unaffected so far.

The shipping industry was placed on high alert on Sunday with warnings that Tehran could retaliate against commercial vessels.

What to watch

• Metcash reports FY25 earnings
• 11:00: (AU) Australia to Sell A$1 Billion 1.75% 2032 Bonds

One more thing...

The beehive is getting an upgrade that is making it easier to protect colonies and the crops that rely on them. All clad in white metal and solar panels, a BeeHome is an industrial upgrade from the standard wooden beehives. It’s not exactly the romantic vision of a beehive or beekeeper lodged in the cultural consciousness, but then that’s not what matters; keeping bees alive does.

The Beewise hive exterior is made of white metal and solar panels. Photographer: KELSEY MCCLELLAN