Market Report.
🇺🇸 Yesterday we started the report with the pause in the freedom project announced by Trump on Sunday. Well, it has finally been discarded. The project announced on Sunday was dismissed 48 hours later, generating the usual bewilderment to which we are accustomed in the last two months of conflict. It seems that the resources employed by the US army to escort only 2 ships against 900 ships in waiting, was clearly unrealistic.
🔍 But there are more interesting reasons why this project didn’t work. U.S. air operations depended on regional support: planes required Saudi and Jordan basing, Kuwaiti overflight routes, and Omani overflight/naval logistics; without those permissions sustained air cover for Gulf ship escorts became militarily unviable. Saudi Arabia explicitly suspended U.S. access to military facilities and airspace (including Prince Sultan Air Base and overflight rights), which NBC sources identify as the primary trigger that made continued operations unsustainable roughly 36 hours after launch.
🇸🇦 Saudi source told NBC events moved quickly but indicated support for Pakistan-mediated diplomacy rather than military escalation. But public reasons cited by Trump for the suspension of “freedom project” included “great progress” on a deal.
🇺🇳 Meanwhile, the US seems to be exhausting its ideas. On Tuesday, Marc Rubio seemed to indicate that they hope the UN will finally do something about the problem created by the war. “We’re asking the UN to call on Iran to stop blowing up ships, remove the mines, and allow humanitarian relief. If the international community can’t rally behind this and solve something so straightforward, then I don’t know what the utility of the UN system is”.
⚛️ He also said, “If Iran had a nuclear weapon and they decided to close the Strait and make our gas prices $9 a gallon, there would be nothing we could do about it”. However, they already closed it without having a Nuclear weapon.
📜 Meanwhile, Rep. Joaquin Castro and 30 other House Democrats have signed a letter addressed to Secretary of State Marco Rubio calling for an end to longstanding U.S. “nuclear ambiguity” toward Israel. The lawmakers are urging the administration to clarify its policy stance regarding Israel’s undeclared nuclear capabilities.
🤝 The White House believes it’s getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations, according to two U.S. officials and two other sources briefed on the issue.
📝 Among other provisions, the deal would involve Iran committing to a moratorium on nuclear enrichment, the U.S. agreeing to lift its sanctions and release billions in frozen Iranian funds, and both sides lifting restrictions around transit through the Strait of Hormuz.
⚠️ At the same time, U.S. President Donald Trump issued a stark warning, saying Iran would face bombing “at a much higher level and intensity than it was before” if it does not agree to a peace deal, underscoring sharply divergent approaches among major powers.
📰 According to POLITICO, citing a senior Gulf Arab official, President Donald Trump is eager to bring the war to an end, but Iranian leaders are so far unwilling to offer the concessions he would need to claim a face‑saving exit.
🛢️ President Donald Trump responded to concerns about rising oil prices by saying, “Even if it’s $200, it’s worth it,” suggesting that higher energy costs would be justified. This kind of statement will most likely hit Trump and the Republican Party in the midterm elections in November.
🇨🇳 As noted in the previous report, Chinese Foreign Minister Wang Yi urged his Iranian counterpart, Abbas Araghchi, during their meeting in Beijing on Wednesday to pursue a diplomatic resolution to the conflict and avoid a return to hostilities.
🌏 Beijing’s bid to be a mediator ahead of U.S. As the world’s largest buyer of Gulf oil and gas, China wants tankers and trade to keep flowing to avoid domestic inflation and recession risks; Xi and Wang repeatedly urged normal passage and free commercial shipping to safeguard Asian markets.
✈️ Trump will travel to Beijing to meet with Xi Jinping on May 14-15. The visit occurs amid U.S.-China friction—Beijing has pushed back on U.S. sanctions (invoking a “blocking rule”) raising stakes for Trump’s summit and complicating U.S. efforts to get China to restrain Tehran rather than economically enable it.
🛢️ Not only is the US oil industry benefiting from its location in Ormuz, but Russia is also doing business. According to Bloomberg, total revenues from oil and gas sales reached 856 billion rubles during the month, underscoring the continued importance of energy income to the Kremlin’s finances despite sanctions and price volatility.
📈 Bullish markets also reach Asia thanks to the rise of the US tech sector. Japan’s Nikkei index is now up 25% year‑to‑date, but it trails South Korea’s KOSPI, which has surged an eye‑catching 75% in 2026 — making it the world’s best‑performing major stock market for a second consecutive year.
📊 Taiwan’s stock market has also posted strong gains, rising 45% so far this year, underscoring the powerful rally across key Asian technology‑heavy indices.
🏦 Japan’s central bank is preparing for the worst.
📉 Many BOJ board members signaled readiness to raise rates if the Iran-driven energy shock persists and sparks second-round inflation effects; members urged hikes “without long intervals” or “without hesitation” if growth doesn’t deteriorate, reinforcing a hawkish bias that could bring a June rate increase.
⚖️ Many members would “look through” a temporary supply shock, but warned that prolonged oil-price pressure raising inflation expectations and underlying inflation would force policy response after assessing pass-through and broader impacts on prices.
📉 A few members flagged downside risks to growth—worsening terms of trade, lower corporate profits, and supply-chain disruption if the Strait of Hormuz stays effectively closed—suggesting BOJ must weigh stagflationary effects when deciding policy.
💴 A stubbornly weak yen, partly due to slow BOJ tightening, raises import costs; Under a risk scenario with elevated oil prices and weaker yen, BOJ projects core inflation near 3% for two years, highlighting vulnerability to sustained energy shocks and the tradeoff between containing inflation and protecting growth.
Market View.
🚀 E‑mini S&P 500 futures are approaching 7,400, while Nasdaq 100 futures are trading near 28,725, as markets increasingly assume a resolution to the conflict involving the United States, Israel and Iran. For now, it appears that matters have concluded positively — fingers crossed.
💵 The US dollar index (DXY) continues to soften in line with geopolitical de‑escalation. It fell to around 97.60 in recent hours before rebounding modestly to the 98 level.
🛢️ Oil prices also declined sharply. Spot Brent crude briefly dropped below $97 per barrel, before stabilising a few hours later back above the $100 level.
🇪🇺 In Europe, DAX 40 futures have broken through key resistance levels and are now trading above 25,000, while Euro Stoxx 50 futures have surpassed 6,000, currently standing at 6,025.
🥇 Gold futures have also reacted in line with de‑escalation dynamics, returning to the upward tone seen prior to the conflict with Iran. Prices are now trading near $4,745 per ounce.
₿ Finally, Bitcoin has edged slightly lower since yesterday morning but remains at notably strong levels above $81,400.
