WS #7940

The dominant macro theme remains the US-Iran conflict and its impact on energy markets and global growth, but this window shows several new developments. Japan's Nikkei hit an all-time high (+2.74%) on hopes for an Iran resolution, while Bloomberg reports that a Strait resolution is 'almost fully priced' by markets. However, European strategists warn that unless the Strait of Hormuz reopens soon, the case for European stocks will degrade materially. The UK borrowed £24.3bn in April, well above forecasts, driven by inflation-linked benefit costs and record debt interest payments, adding fiscal pressure. Turkey's Financial Stability Committee met after a court ruling ousted the opposition leader, pledging steps to ensure financial system stability. Tesla is recalling 14,575 US vehicles over missing weight info, and Hyundai is recalling 421,078 vehicles over unexpected braking risk. China's Foreign Ministry firmly opposed US arms sales to Taiwan, and Foreign Minister Wang Yi will chair a UNSC meeting on May 28 and visit Canada May 28-30. The Iran war narrative is stable but with incremental diplomatic progress; the Strait resolution being 'almost fully priced' suggests limited upside surprise left.