WS #7372

The dominant signal in this window is the escalation of US-Iran tensions, with Trump threatening military action against Iranian missile sites, stating the US could destroy them within one day. This is corroborated by reports of Ukrainian drones striking Russia's Ryazan oil refinery, causing major fires, and a separate report of the Latvian government collapsing after a drone strike on an oil facility. The geopolitical risk is compounded by Indian state retailers hiking petrol and diesel prices for the first time in four years, signaling pass-through of higher crude costs. Separately, the Trump-Xi summit continues with tangible outcomes: China has agreed to buy US oil, and US Trade Representative Greer anticipates billions in American agricultural purchases. This is a positive for US energy and agriculture but is being overshadowed by the Iran conflict. The Yen weakened 1% this week to 158 per dollar, putting traders on intervention watch. The prevailing macro narrative is ESCALATING on US-Iran tensions, which is a bearish counter-signal to the prior trade optimism. The Latvian government collapse and Indian fuel price hikes are second-order effects of elevated oil prices.