WS #7373

The dominant signal in this window is the escalation of the Ukraine-Russia conflict, with reports of a massive Russian missile attack on Ukraine, including strikes on Kyiv resulting in at least 21 deaths, and Ukrainian drone strikes on a Russian oil refinery in Ryazan. This is corroborated by multiple sources (Kyiv Independent, CNN, OSINT accounts). The conflict escalation is a bearish signal for risk assets and bullish for energy. Separately, the Trump-Xi summit continues to yield tangible outcomes: China has agreed to buy US oil, and the US and China agreed to keep the Strait of Hormuz open, with Treasury Secretary Bessent stating China will work behind the scenes to help reopen it. This is a positive for US energy (XOM, CVX) and a counter-signal to the Iran conflict-driven oil supply fears. Japan's producer prices surged 4.9% in April, the biggest jump since 2014, backing the case for a BOJ rate hike, which is bearish for Japanese equities and bullish for the yen. The House again blocked a war powers vote to halt the Iran conflict, indicating continued escalation risk. The prevailing macro narrative is ESCALATING on Ukraine-Russia and STABLE on US-Iran tensions, with the Trump-Xi summit providing a partial counterweight via oil supply assurances.