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WTI Holds Gains Despite Biggest SPR Drawdown In 45 Year History, Production Jumped

Oil prices are higher this morning (extending its 8%-plus surge of the last three days) as Middle East tensions simmer and global stockpiles shrink at a record pace.

WTI topped $103 and Brent crude traded near $108 a barrel, erasing its retreat earlier on Wednesday, after the IEA said global observed oil inventories declined at a rate of about 4 million barrels a day in March and April.

Saudi Arabia told OPEC that its output sank to the lowest level since 1990.

“With global oil inventories already drawing at a record clip, further price volatility appears likely ahead of the peak summer demand period,” the Paris-based IEA said in its Oil Market Report.

The market will remain “severely undersupplied” until October even if the conflict ends next month, the agency said.

For obvious reasons, this morning's official inventory and supply data (for the US) is now top of mind.

API

• Crude -2.2mm

• Cushing

• Gasoline +502k

• Distillates -319k

DOE

• Crude -4.3mm (-2.5mm exp)

• Cushing -1.7mm

• Gasoline -4.08mm - 13th weekly draw in a row

• Distillates +190k - first build in 7 weeks

Crude stocks saw a bigger than expected drawdown last week (the third week in a row) as Cushing inventories drop and while Distillates saw a small build, Gasoline stocks plunged... again...

Source: Bloomberg

The drawdowns from the Strategic Petroleum Reserve continue to accelerate. The 8.6mm barrel draw was the largest on record...

Source: Bloomberg

US crude production jumped last week...

Source: Bloomberg

Crude exports jumped back up to near the 6 million barrel a day mark, rising 742,000 barrels to around 5.5 million barrels a day. Anything above 4 million barrels a day is generally considered robust demand and in recent weeks the US sets its all-time record for crude exports as the Iran war disrupts flows globally. 

Imports of Venezuelan crude soared to 598,000 barrels a day, the highest since early 2019 when the US first imposed a de facto ban on oil imports from the country. 

Refinery runs bounced back in a big way and are now just shy of levels seen at the same time last year as maintenance season wraps up.

Valero Port Arthur was finally able to restart its largest crude unit, following a end-March fire, helping to bolster crude processing in the region. 

WTI extended gains, topping $103.50 this morning, as Martijn Rats, commodities strategist at Morgan Stanley, told clients in a Monday note: "That this is the largest oil supply disruption in the history of the oil market is neither an exaggeration nor controversial."

Morgan Stanley forecasts the market will lose another billion barrels over the course of 2026 due to the time required to restart oilfields, repair refineries and reposition the tanker fleet'

“We expect this destocking environment to continue over the next number of months and ultimately drive a restocking phenomenon longer-term,” Plains All American Pipeline LP Chief Executive Officer Willie Chiang said on an earnings call Friday. 

Tyler Durden Wed, 05/13/2026 - 10:37

Chinese Supertanker Sails Out Of Hormuz In Rare Exit

As president Trump was on his way to China, a Chinese tanker appears to have exited the Strait of Hormuz as it sails toward an area where the US has enforced a blockade, ahead of talks between US President Donald Trump and counterpart Xi Jinping, Bloomberg reported today, citing ship-tracking data showing the VLCC moving south along the eastern side of the chokepoint.

The supertanker which sailed past Iran’s Larak island, and into the Gulf of Oman, is Yuan Hua Hu, owned by Cosco, and would be only the third tanker carrying oil for China from the Persian Gulf that has traversed Hormuz since the start of the war. The vessel is broadcasting its Chinese origin and crew, Bloomberg said, as other vessels have done previously to secure safe passage.

Yuan Hua Hu’s draft indicates it’s fully loaded with oil, or close to the vessel’s 2 million barrel capacity. It was seen lifting from Iraq’s Basrah terminal in early March, according to ship-tracking data. The vessel was chartered by Unipec, the trading arm of Chinese state refining giant Sinopec, according to a fixture seen by Bloomberg.

In April, two very large Chinese crude carriers were allowed to pass the Strait of Hormuz under Iran’s toll system that demands payment of $2 million per supertanker to pass. One of those was the same Yuan Hua Hu that is currently moving along the strait.

China imports the bulk of its energy from the Middle East, and while it has amassed substantial crude oil stockpiles that are helping it weather the worst of the crisis - anecdotally over 1.4 billion barrels - restoring normal flows from the Persian Gulf is important for one of the world’s top energy importers.

Earlier in the war, reports emerged that Beijing had pressured Iranian officials to stop attacking vessels carrying crude oil and LNG via Hormuz. Judging from later events that involved Iranian strikes on vessels in the chokepoint, Tehran did not yield to the pressure.

The moment is delicate for relations between the United States, China, and Iran as President Trump heads to Beijing for talks with President Xi on topics that are bound to include traffic via the Strait of Hormuz. According to media reports, President Trump plans to have “a long talk” with President Xi about Iran, even as he told news agencies he did not need China’s help in resolving differences with Iran.

Tyler Durden Wed, 05/13/2026 - 10:10

Two Empty Qatari LNG Tankers Head Toward Gulf After Weekend Hormuz Transit Breakthrough

Bloomberg ship-tracking specialist Stephen Stapczynski has identified two empty Qatari LNG tankers, Al Gattara and Fraiha, transiting north toward the Gulf area after idling near Mauritius.

This movement comes just days after a Qatari LNG carrier successfully transited the Strait of Hormuz, suggesting that Doha may be engaged in backchannel discussions with Tehran about a gradual normalization of LNG flows through the maritime chokepoint.

Al Gattara and Fraiha could be returning to Qatar to load LNG cargoes. If confirmed, this would mark a notable development after a Qatari LNG tanker sailed through the Hormuz chokepoint over the weekend, the first seaborne LNG export from Qatar since the war began in late February. However, no empty Qatari LNG tankers had yet returned through the critical waterway for loading operations.

As of Wednesday, Hormuz tanker flows remain highly disrupted, as the U.S. and Iran have yet to agree on a deal. President Trump landed in China earlier today, and the Trump-Xi summit will focus on unfreezing the world's most critical waterway.

Polymarket:

//--> //--> Strait of Hormuz traffic returns to normal by end of May?
Yes 8% · No 93%
View full market & trade on Polymarket

We have pointed out that a one-month countdown is underway. If Hormuz traffic does not resume, the real energy crisis will begin after June. 

Tyler Durden Wed, 05/13/2026 - 09:40

Trump Says 'Open Up China' Before Landing In Beijing For Pomp-Filled Red Carpet Airport Welcome

President Trump and his Air Force One entourage have arrived in Beijing on Wednesday, greeted by a lavish red carpet welcome. The American president was received by Chinese Vice President Han Zheng, China’s ambassador to Washington Xie Feng, Executive Vice Foreign Minister Ma Zhaoxuong, and US envoy to Beijing David Perdue.

Reports describe the extravagant welcoming ceremony as made up of a military honor guard and band, as well as about 300 Chinese youths waving alternating Chinese and American flags.

via Associated Press

"We’re the two superpowers," Trump had told reporters just before departing to China the day prior. "We're the strongest nation on Earth in terms of military. China’s considered second."

This is Trump's first visit there in nearly nine years, and an array of pressing issues will be discussed over the next two days of a packed-out schedule.

Official events with President Xi Jinping will kick off Thursday at 10am (local) with a formal welcoming ceremony at the Great Hall of the People, leading into the first meeting with Xi, after which the Chinese leader will host Trump for a state banquet at 6pm.

⚡️ Trump has arrived in China — the first visit by a U.S. president to Beijing since 2017

A day earlier, the U.S. president said Washington does not need China’s help on Iran.

According to Trump, the U.S. will “win one way or another — peacefully or otherwise.”

A meeting… pic.twitter.com/2QWYQZc5q8

— NEXTA (@nexta_tv) May 13, 2026

Also looming large over the historic visit is the ongoing Iran conflict. Just before departing Washington Trump while talking to reporters raised eyebrows in remarking that the financial situation for Americans was not a factor in his decision-making when it comes to Iran and dealing with the nuclear issue. 

"Not even a little bit," he said in the remarks at a moment Americans continue to face rising gas and food prices, connected to the war.

A day earlier, the U.S. president said Washington does not need China’s help on Iran. According to Trump, the U.S. will “win one way or another — peacefully or otherwise.”

Meanwhile, over in the Strait of Hormuz:

A Chinese supertanker carrying two million barrels of Iraqi crude has passed through the Strait of Hormuz, according to ship-tracking data.

The Yuan Hua Hu crude carrier is now anchored off the Gulf of Oman near where the US navy has set up a blockade of Iranian vessels. It marks the third known passage by a Chinese oil tanker through the waterway since the US-Israeli war on Iran began.

Trump has landed in Beijing. Motorcade en route to hotel. pic.twitter.com/PkN5XKz7QB

— Open Source Intel (@Osint613) May 13, 2026

While Iran and Taiwan remain pressing geopolitical challenges between the US and China, and for the whole globe really, Trump appears ready to focus on major business deals, per the Associated Press:

But Trump appeared firmly focused on business deals, with Nvidia chief Jensen Huang boarding the plane at the last minute in Alaska and Tesla’s Elon Musk also traveling on the presidential jet.

As the global AI race hots up, China is currently banned from purchasing the cutting-edge chips that Huang’s company produces under US export rules that Washington says are to protect national security.

Trump said in a social media post en route that he would be “be asking President Xi, a Leader of extraordinary distinction, to ‘open up’ China so that these brilliant people can work their magic.”

But this is how Beijing is going to read this....

Pretty hilarious of him to say that he's going to China with Jensen Huang to ask them to "open up," when the whole issue is that it's the U.S. that banned the sale of advanced Nvidia chips...

You can't ask China to reverse your own policies 🤷‍♂️ pic.twitter.com/B6jSLZxRik

— Arnaud Bertrand (@RnaudBertrand) May 13, 2026

Apparently very few of the CEOs were on Air Force One, with the rest flying presumably on private jets...

The US has banned an array of Chinese technology imports, citing national security, and so it's likely that China will only see this as having to go the other way - that it is the United States which must 'open up' to more Chinese business and tech.

The Chinese foreign ministry meanwhile stated Wednesday it "welcomes" Trump’s visit and that "China stands ready to work with the United States... to expand cooperation and manage differences."

Tyler Durden Wed, 05/13/2026 - 09:35

Trump Mulls 'Operation Sledgehammer' If Ceasefire Collapses, But Iran Has Re-Armed

The Pentagon is considering renaming the war with Iran from "Operation Epic Fury" to "Operation Sledgehammer" if President Trump orders a renewed full-scale bombing campaign against Iran, according to an NBC News report published Tuesday.

The report came on the eve of day 75 since the US and Israel launched the conflict. US sources touted to NBC that the United States now has greater military capabilities in the region than it did before the US and Israel launched the war on February 28. But US intelligence is now also suggesting Iran's missile capability is getting back up and running as well.

US Navy file image

After Iran had clearly withstood the shock and destruction of the opening days and couple weeks of major American and Israeli bombing raids over its cities and airbases, Trump belatedly ordered more warships, carriers, and troops into the region (Marine Expeditionary Force) - after which the blockade of Iranian ports was eventually put in place.

Now amid the heavier US naval and combined forces build-up in the CENTCOM area, "We are in a better spot now than on February 27," a US official said to NBC. "We have more firepower and capability."

The reported name change appears part of the Trump administration's effort to navigate around the War Powers Resolution, which is the 1973 law designed to limit executive war powers and reinforce Congress's constitutional authority to declare war.

According to NBC, the name change would be to underscore how seriously the administration is considering resuming the war, and could allow Trump to argue that it restarts the 60-day clock that requires congressional authorization for war, by way of the name change loophole.

While Republicans hold control of the Senate and have a slim majority in the House, there have lately been signs of bipartisan frustration at how the war is going, and the coming financial impact on the American public.

Also, even though the Pentagon has its assets in place if fighting were to resume, fresh reporting in NY Times and elsewhere indicates that Iran too has re-armed and regrouped.

"U.S. Intelligence Shows Iran Retains Substantial Missile Capabilities. Secret new assessments say Iran has operational access to 30 of its 33 missile sites along the Strait of Hormuz, suggesting that its military remains far stronger than President Trump has asserted," NY Times reports.

The report also indicates, "The Trump administration’s public portrayal of a shattered Iranian military is sharply at odds with what U.S. intelligence agencies are telling policymakers behind closed doors, according to classified assessments from early this month that show Iran has regained access to most of its missile sites, launchers and underground facilities."

This further opens up the possibility that US forces could sink into protracted quagmire should the White House choose to escalate the conflict through a renewed bombing campaign, or else launching some kind of ultra high-risk ground operation to recover Iran's nuclear material.

Interesting how U.S. intelligence reports are fluctuating, one moment Iran’s military is obliterated, another it’s retaining its capabilities. No leadership, then reports of serious cracks in the system, then a conclusion that Mujtaba is consolidating power. That’s completely… https://t.co/3iZAfMhZel

— Ali Hashem علي هاشم (@Alihashem) May 12, 2026

Trump is still insisting on taking Iran's "nuclear dust" out of the country, but how that precisely happens is anyone's guess - and would likely prove to be a long shot.

On Tuesday, speaker of Iran's parliament, Mohammad Bagher Ghalibaf, said  his country's military stands ready to "teach a lesson" to any aggressor as Trump has said the ceasefire is hanging by a thread. "Our armed forces are ready to respond and to teach a lesson for any aggression," he said on social media. "A bad strategy and bad decisions always lead to bad results - the world already understands this."

Tyler Durden Wed, 05/13/2026 - 08:50

Yields Spike As Producer Prices Explode Higher In April

After yesterday's hotter than expected CPI (driven in large part by Energy, but seeing some contagion into Services costs), this morning's Producer Price print for April was expected to show a major surge in annual wholesale inflation.

With the eight straight monthly increase, PPI rose by a massive 1.4% MoM (vs +0.5% MoM exp) - the biggest MoM jump since March 2022, lifting PPI by a stunning 6.0% YoY (vs 4.8% YoY exp). That is the hottest PPI YoY since Dec 2022...

Source: Bloomberg

Services and Energy saw the biggest rise (while construction costs actually deflated very modestly)...

Core Producer Prices spiked 1.0% MoM (more than triple the +0.3% exp) smashing Core PPI YoY up 5.2% (also the hottest since Dec 2022)...

Source: Bloomberg

And finally, one could argue this is as bad as it gets for the energy component as oil prices have stabilized...

Source: Bloomberg

But of course, the pipeline of those energy costs is perhaps only just starting to trickle into the rest of the economy.

PPI triggered a spike in 2Y yields...

Now back above 4.00% at their highest since March with the market now pricing in a 50% chance of one rate-hike in 2026...

It appears any chance of Warsh cutting rates (as per Trump's expectations) are off the table... for now.

Finally, there is perhaps a silver lining from this ugly PPI report. Other than airfares (which rose 3%) the components that feed through into PCE inflation were pretty tame; portfolio management fees dropped 2.4% and the various medical-care components showed a maximum rise of 0.3%.

That may mitigate the impact of the report, but it’s still hard to totally ignore the risk that inflation becomes a more pressing concern moving forward. 

Tyler Durden Wed, 05/13/2026 - 08:40

UK Risk Spreads Oddly Calm As PM Starmer Faces Growing Threat Of Ouster

Wes Streeting is reportedly poised to resign as UK health secretary and launch a formal challenge to UK PM Keir Starmer in a Labour Party election.

Following a meeting with Starmer in Number 10 (which lasted just 16 minutes), an “ally” of the health secretary told The Times that Streeting was “going to go for it”.

Around 100 Labour MPs have publicly called for Starmer to resign although a similar number of lawmakers have urged challengers to hold back from launching a leadership bid.

Starmer’s leadership is hanging by a thread after Labour lost nearly 1,500 councillors across English councils and were defeated by nationalist parties in Wales and Scotland.

A slew of ministerial resignations have so far failed to force Starmer’s downfall this week.

As Bloomberg reports,s everal allies of Streeting have been among those to say he should go, leading lawmakers to conclude that he is attempting to build pressure against the premier ahead of announcing a challenge.

“I think it’s being a bit over dramatized,” Starmer loyalist Nick Thomas-Symonds said on BBC Radio 4 on Wednesday, ahead of Starmer’s meeting with Streeting.

“Anyone would think we were talking about the final scene at Casino Royale or something.”

Trade unions have joined the calls for change.

“It’s clear that the Prime Minister will not lead Labour into the next election, and at some stage a plan will have to be put in place for the election of a new leader,” unions affiliated with the party said in a statement published Wednesday morning.

In a statement alongside the King’s Speech this morning, Starmer said the country stood at a “pivotal moment”.

He said multiple crises had meant that the “status quo had repeatedly made working people pay the price”.

“This time must be different. And this King’s Speech shows it will be different with a plan to make this country stronger and fairer.”

Starmer’s move was seen as effectively daring his opponents to come out and publicly challenge him, a position that his deputy, David Lammy, put voice to in Downing Street on Tuesday evening.

“It’s been 24 hours now, and nobody has come forward to put themselves forward in the processes that exist in the party,” Lammy told reporters.

“No one seems to have the names to stand up against Keir Starmer, and for those who are suggesting that he should stand down, they should say which candidate would be better.”

Interestingly, the odds of a Starmer resignation in the short-term (by the end of May) have tumbled...

...while the odds of him leaving by year-end have soared...

And while the UK is in the midst of a political crisis that could see off its sixth Prime Minister in only a decade, Bloomberg's Simon White notes that risk spreads are remarkably contained.

A measure including UK asset swap spreads, gilt spreads, bank CDS, sterling, etc, is only modestly wider and is below where it was on the outbreak of the Iran war, Chancellor Rachel Reeves’ first budget, and the ill-fated, short-lived premiership of Liz Truss.

Gilt yields are indeed higher, and are so across the curve, which is suggestive of extra risk premium for holding UK debt.

“I am underweight gilts,” said Shinji Kunibe, a portfolio manager at Sumitomo Mitsui DS Asset Management Co. in Tokyo.

“Yields have already risen beyond Truss-era levels, so they’re attractive if we see any positive signals. But with so much uncertainty, I doubt anyone is willing to touch gilts right now.”

However, that has happened to other countries too - albeit to a lesser extent - due to the energy shock, muting the spread impact on the UK.

“I’d love to buy them because obviously long-end yields are so enticing on paper,” the chief multi-asset strategist at HSBC said in an interview on Bloomberg radio.

But with a potential challenge to Prime Minister Keir Starmer’s leadership keeping volatility high, “right now, gilts are a half-hour trade.”

There is also perhaps a hope that in the gilt market that the potential replacements for Keir Starmer are beginning to preach greater fiscal orthodoxy, if recent political commentary is to be believed.

Tyler Durden Wed, 05/13/2026 - 08:25

Futures, Yields And Oil All Rise As Trump Arrives In China

US equity futures are up (alongside oil and yields, go figure), reversing yesterday's modest losses, as optimism around the earnings potential of AI outweighs concerns over hot inflation readings bringing dip buyers back to drive tech stocks higher, with traders betting that the tech rally has further room to run while also hoping on good news from the Trump-Xi summit set to start today in Beijing. As of 7:30am ET, S&P futures were up 0.2% and Nasdaq futures rose 0.7% thanks to a rebound in Semi stocks in the Asian and EMEA sessions. In premarket trading, semis are bid as yesterday’s dip buyers appear to be once again rewarded. NVDA is up 2.5% as CEO Huang joining Trump’s China trip. Chip and memory sotcks, the key drivers of the past month’s narrow rally in the artificial-intelligence trade, posted broad gains. While there were no material updates on US / Iran, today attention shifts elsewhere as Trump’s China trip kicks off (with both Elon and Jensen on board AF1); the President appears to be in deal-making mode and China is said to oppose SoH tolls, though the Middle East is not expected to be a focal point. The dollar climbed 0.2% as commodities are mixed with strength in Ags and copper, while oil is unchanged erasing all of its overnight losses. Mag7 names underperforming broader indices as Cyclicals ex-Energy are outperforming. Today’s macro data focus is on PPI following the hawkish CPI print yesterday

In premarket trading, Mag 7 stocks are mixed: Nvidia up 2.4% as CEO Jensen Huang joins President Donald Trump on his visit to China.
(Tesla +1.2%, Alphabet +0.4%, Amazon +0.3%, Meta -0.1%, Microsoft -0.2%, Apple -0.3%)

• Chipmakers, opticals and storage firms gain as supply for global memory chips, key to AI infrastructure build-outs, tightens further. The sector is also getting a boost from Huang’s trip to China.
• Arteris Inc. (AIP) gains 24% after the semiconductor company’s first-quarter revenue beat estimates and it raised its full-year revenue guidance following strong AI-driven demand.
• Karman Holdings (KRMN) is down 5.6% after the aerospace & defense company reported adjusted earnings per share for the first quarter that matched the average analyst estimate.
• Nextpower (NXT) rises 13% after the solar-equipment company raised its fiscal 2027 outlook for revenue. It also said it agreed to acquire the assets of Zigor Corp.’s power conversion business and its US based subsidiary, Apex Power.

In other corporate news, Subprime lender Goeasy adopted a shareholder rights plan as its results showed more consumer credit strain. Hedge fund Dymon Asia Capital is on track to reach $8 billion in AUM by the third quarter as more global investors seek to back Asia-based hedge funds. In AI news, Anthropic is said to be in talks to raise new capital of at least $30 billion at a $900 billion valuation. The company also warned investors to avoid a number of secondary marketplaces as unauthorized sellers of the company’s shares. AI chipmaker Cerebras Systems is said to be guiding prospective investors that it expects to prices its IPO above the top of its marketed range. Capacity constraints and a tightening supply of critical components threaten to throttle the brisk growth for China’s AI hardware suppliers, not for a lack of AI demand. SoftBank reported a surge in quarterly profit due to valuation gains on its OpenAI investment, boosting confidence at the Japanese company to bet even more on the ChatGPT maker. 

Tech stocks are rallying again as investors count on the vast earnings potential of AI to withstand worries over elevated oil prices, with flows from the Middle East showing no sign of normalizing. Traders are also banking that this week’s summit between Trump and China’s Xi Jinping could unlock a series of trade deals, especially around semiconductors.

“The most difficult question for investors right now is to find hedge trades in case the war in Iran drags on and oil prices stay high,” said Marija Veitmane, head of equity research at State Street Global Markets. “The best place to hide would be companies with stronger earnings and margins, as well as highly visible and predictable earnings. All roads lead to tech.”

One of the aims from the Trump-XI meeting in China this week is to avoid another rare earth shock. However, an analysis from Bloomberg Economics sees China as likely to keep dominating rare earth supply chains through at least 2030. AI chip technology is another likely topic for discussion, especially now that Nvidia’s CEO has joined a roster of US business leaders accompanying Trump on the visit.

Higher oil costs have started to seep into consumer prices, pushing bond yields up as investors fear central bankers will have little choice but to tighten policy. Markets will get another reading Wednesday on US inflation, with producer prices expected to show the war pushing costs up throughout the supply chain.

“The PPI data today will likely confirm the spike in inflation,” said Joachim Klement, head of strategy at Panmure Liberum. “Inflation in the US is rising so quickly that even if Kevin Warsh wants to cut interest rates, he may not have any arguments to do so by the time he shows up at the Fed.”

In other assets, oil inventories are falling around the world at a record pace and will continue to drop for months, according to the IEA. Copper extended gains above $14,000 a ton, inching toward a record high seen earlier this year, as supply risks mount on mine disruptions around the world. 

Looking at earnings, Dynatrace is set to report numbers before the market opens. Earnings from Cisco and Birkenstock follow later in the day. Cisco’s growth outlook for the year remains durable given stable enterprise demand and quickening investment in AI networking infrastructure, BI said. 
Conferences include Bank of America global healthcare in Las Vegas and Bank of Montreal global farm to market / chemicals in New York.  

In Europe, the Stoxx 600 trades higher by 0.3% rebounding from the previous session’s losses as investors parse earnings reports and track a broader rally in technology. Here are some of the biggest movers on Wednesday:

• Alstom gains as much as 5.2% after the French rolling-stock group reported its latest earnings, which analysts say is a reassuring update following its preliminary FY release on April 17, when it also withdrew its FY guidance, sending shares 27% lower on the day.
• Merck KGaA shares jump as much as 9.4%, the most in more than seven months, after the German company reported better-than-expected results for the first quarter and boosted its adjusted Ebitda forecast for the full year.
• Umicore gains as much as 15% following an upgrade to buy from neutral at Goldman Sachs, which sees clear re-rating potential for the Belgian materials technology group based on the performance of its Recycling division.
• E.On shares gain as much as 4.6% after the German power company reported first-quarter results. Analysts at Jefferies and RBC Capital tout strength in retail operations.
• Alfen surges as much as 27% after delivering first-quarter results above analyst expectations, driven by its Smart Grid and Energy Storage divisions.
• Adecco shares drop as much as 14% after the recruitment company posted a disappointing margin in the first quarter and warned this will contract in the second.
• Siemens shares fluctuate after announcement of a share buyback and results that are described as slightly disappointing by some analysts, who say strength in its core Digital Industries and Smart Infrastructure divisions was offset by a weaker margin in Mobility.
• Swatch shares fall as much as 7.6%, the most in over a year, as Oddo BHF doubts whether the pocket watch models of the Swiss watchmaker’s collaboration with Audemars Piguet will bring a sustained boost in revenue.
• Norbit drops as much as 7.4% after the Norwegian sensor technology firm reported its latest earnings. DNB Carnegie says both first-quarter results and second-quarter guidance were on the “softer side” and could lead to 6-8% cuts to full-year 2026 Ebit estimates.
• Vistry shares fall as much as 13% as the UK homebuilder cautions that first-half profit in 2026 is likely to be significantly lower than in the previous year and pauses its share buyback program.

Earlier in the session, Asian equities climbed on Wednesday, as a rally in South Korea more than offset a selloff in Taiwan. The MSCI Asia Pacific Index was up as much as 0.7%, with SK Hynix and Samsung Electronics the biggest boosts as tech sentiment was supported by news that Nvidia CEO Huang joined US President Trump’s trip to China as a last-minute addition. Alibaba’s ADR has been choppy in pre-market trade, currently lower by 1.7% after 4Q revenue fell short of estimates. Korea’s benchmark gained 2.6%, while Japanese stocks extended their advance to a third day. Investors in Asia are increasingly driven by expectations around the AI infrastructure buildout and are focused on whether the technology’s lofty promises will translate into earnings. That has largely overshadowed concerns about supply chains and energy risks stemming from the war in the Middle East.

In FX, the Bloomberg Dollar Spot Index rose 0.2%, a third day of gains, after a report on Tuesday showed the US consumer-price index rose 3.8% from a year ago.NZD/USD fell 0.5% to 0.5923, as the kiwi led G-10 losses against the dollar. EUR/USD fell 0.3% to 1.1702, a one-week low; French unemployment rose to the highest level in five years. GBP/USD slips 0.1% to 1.3522; Keir Starmer faces growing pressure to step down as Britain’s prime minister

In rates, treasuries yields are flat, with yields within about 1bp of Tuesday’s close, with oil prices steady. US 10-year yield near 4.46%, 2-year near 3.99% are little changed, with UK 2-year about 2bp lower on the day. Gilts outperform in choppy session, though gains were trimmed after report that cabinet minister Wes Streeting is preparing to trigger a leadership contest. Focal points of US session include April PPI data and $25 billion 30-year new-issue bond auction. Treasury refunding auctions conclude with $25 billion 30-year bond sale at 1pm New York time, following tails for 3- and 10-year notes over past two days. WI 30-year yield near 5.02% is 14.4bp cheaper than last month’s, which tailed by 0.5bp. IG dollar issuance slate includes a couple of offerings so far. Twelve companies priced a combined $15.6 billion of debt Tuesday, paying about 3.8 basis points in new issue concessions on deals that were 4.3 times covered. Two companies opted to stand down and are expected to try again Wednesday after PPI release

In commodities, WTI crude oil futures are little changed, hold recent gains around $102 as Middle East tensions simmer and global stockpiles shrink at a record pace. Brent, meanwhile, fluctuated around $108 a barrel after rising more than 8% over the past three sessions. Oil inventories are falling around the world at a record pace and will continue to drop for months, the International Energy Agency said.. Spot gold trades down 0.4% as silver adds 0.5%. Bitcoin up 0.3%. 

Economic data slate includes April PPI at 8:30am. Fed speaker slate includes Collins (11:30am), Kashkari (1:15pm) and Logan (7pm)

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.8%
• Russell 2000 mini +0.2%
• Stoxx Europe 600 +0.5%
• DAX +0.6%
• CAC 40 -0.2%
• 10-year Treasury yield little changed at 4.46%
• VIX -0.1 points at 17.94
• Bloomberg Dollar Index +0.2% at 1194.95
• euro -0.4% at $1.1696
• WTI crude -0.7% at $101.47/barrel

Top Overnight News

• The discussions about possibly replacing “Operation Epic Fury” with “Operation Sledgehammer” underscore how seriously the administration is considering resuming the war started on Feb. 28, and could allow Trump to argue that it restarts the 60-day clock that requires congressional authorization for war. NBC
• U.S. Intelligence Shows Iran Retains Substantial Missile Capabilities. Secret new assessments say Iran has operational access to 30 of its 33 missile sites along the Strait of Hormuz, suggesting that its military remains far stronger than President Trump has asserted. NYT
• Both Iraq and Pakistan have cut deals with Iran to ship oil and liquefied natural gas from the Gulf, according to five sources with knowledge of the matter, in a demonstration of Tehran's ability to control energy flows through the Strait of Hormuz. RTRS
• Trump said he would urge China's Xi Jinping to "open up" to U.S. business on his way to a summit in Beijing on Wednesday, adding Nvidia's Jensen Huang to a group of CEOs travelling with him. The CEOs accompanying Trump are drawn mainly from companies seeking to resolve business issues with China, such as Nvidia, which has struggled to get regulatory permission to sell its powerful H200 artificial intelligence chips there.
• OpenAI investment gains helped drive a surprise rise in SoftBank’s quarterly profit, while Tencent and Alibaba revenue missed. BBG
• China’s tech-heavy ChiNext index hit a record as an AI-driven rally lifted chipmakers and tech suppliers. BBG
• Construction projects are stalling around the world as the closure of the Strait of Hormuz disrupts the supply of crucial materials and drives up prices for oil-derived products like paint and insulation. FT
• For the first time in three years, inflation is outstripping growth in Americans’ paychecks. Blame the gas pump. Americans are currently paying about $4.50 a gallon for regular gasoline, according to AAA, up more than 50% since the initial U.S.-Israeli attack on Iran in late February. Pay increases aren’t keeping up. WSJ
• Oil broke a run of three straight daily gains even as the Strait of Hormuz remains practically shut and Trump repeated his threats against Iran. Inventories are falling at a record pace of about 4 million barrels a day, the IEA said. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following on from the mostly subdued handover from Wall Street, where sentiment was dampened by tech weakness, higher oil prices and firmer-than-expected inflation, while the geopolitical situation remained uncertain with Iran said to require five confidence-building conditions for it to enter a second round of talks with the US. ASX 200 declined amid weakness in the top-weighted financial sector after shares in Australia's largest lender CBA, slumped around 10% following its earnings results, while the recent federal budget announcement failed to spur risk appetite and was seen by analysts to hit consumer stocks. Nikkei 225 clawed back initial losses after encouraging current account and bank lending data, and despite hawkish market pricing of around a 70% chance for a BoJ rate hike next month. Hang Seng and Shanghai Comp were mixed as participants digested earnings releases and with the focus on the looming Trump-Xi summit, while the US President is on his way to Beijing with various CEOs on Air Force One, including the late addition of NVIDIA's Jensen Huang.

Top Asian News

• BoJ said there was no meeting held between the US Treasury Secretary Bessent and BoJ Governor Ueda.
• US Treasury Secretary Bessent said that thanks to the powerful bond between US President Trump and Japanese PM Takaichi, the relationship between the US and Japan is stronger than ever before, while he was happy to share with the PM the belief that the fundamentals of the Japanese economy are indeed strong and resilient. Furthermore, he said they exchanged views on the US-Japan investment program, critical minerals, President Trump's upcoming visit to Beijing, and other subjects of mutual interest.

European bourses (STOXX 600 +0.4%) have begun to reverse the losses seen at the start of the week, despite the mixed Asia-Pac and stateside trade. The DAX 40 is the outperformer, helped by a flurry of positive earnings, while the CAC 40 lags its peers despite the gains in STMicroelectronics and ArcelorMittal. Sectors point to a more mixed picture. Basic Resources tops the pile, as copper extends above USD 14k/t while aluminium, nickel and iron ore are also bid. The underperformer is Media, closely followed by Travel & Leisure. TUI reported Q2 earnings, in which it sees strong demand in the Holiday Experiences Business Area in H2.

Top European News

• UK Labour-affiliated union group TULO said Labour cannot continue on this path, is it clear the PM will not lead Labour into the next election.
• SNP to force a vote on UK PM Starmer via an amendment to King’s Speech debate.
• UK government appoints loyalists to fill gaps left by government resignations.
• UK government whips believe Wes Streeting will make his move on Thursday, to avoid clashing with the King’s Speech, while they also believe Andy Burnham doesn’t have an MP ready to quit, and that aside from the 87 MPs who’ve publicly called for Starmer to go, the same number privately want him to step down, according to Sky News reporter Jon Craig.

Trade/Tariffs

• The US White House has reportedly not ruled out potential Chinese direct investment in the US, Semafor reported.
• US President Trump posted that NVIDIA CEO Huang is on Air Force One along with a number of CEOs of large US companies, including Tesla, Boeing, Cargill, Citi, Goldman Sachs, GE Aerospace, Micron & Qualcomm. Trump added that his first request to Chinese President Xi will be to open up China so that these brilliant people can work their magic.
• US Treasury Secretary Bessent and Vice Premier He held talks. Following the conclusion, Chinese state media reported that China and the US held candid, in-depth and constructive exchanges.
• EU Commission has outlined a potential compromise to break the EU-US trade deal deadlock, with specific reference to the sunrise clause, Politico reported.

FX

• G10s trade under a relatively strong USD, with recent upside in DXY as it vaulted its 100-DMA (98.45) and 200-DMA (98.52), to make a current peak at 98.58.
• USD continues to be driven by oil/yields as geopolitics remain in focus. Today, US President Trump is expected to arrive in China for his summit with Xi, where talks are expected to take place on Thursday and Friday. No breakthrough is expected in US-China relations, though the situation in Iran will likely be one of the core topics, with some fearing an Iran-for-Taiwan bargain. (Full analysis at 06:50BST on the headline feed). The session also sees a number of Fed speakers, including Collins, Kashkari and Logan.
• GBP trades a touch lower against a strong buck, but stronger against the Euro despite continued political uncertainty. As it stands, the PM intends to stay in his post and run in any leadership contest against challengers (likely Streeting. Potentially, Miliband, Rayner, Carns, and/or Burnham). Theoretically, if a contest were to be triggered now, Starmer would be the favourite (100+ MPs back him, against c. 90 who have expressed no-confidence). Recent newsflow has been around a very brief Starmer-Streeting meeting. We are unlikely to see a readout due to the King's speech later today. In terms of timing, at 14:30 BST, two backbench (Junior) Labour MPs will ask "typically light-hearted" questions, according to Politico. Opposition leader Badenoch speaks third, then the PM will respond to her questions.
• EUR/GBP trades towards the lower end of Tuesday's 0.8653-0.8697 range, Cable continues to move lower as it did on Tuesday, currently supported by the 1.3530, with further support lower at 1.35, the previous session's low. Ultimately, any leadership change would likely be a shift to the left and therefore weigh on the Pound.

Central Banks

• ECB's Muller said the EU has not fallen into stagflation.
• ECB's Villeroy said the ECB must be ready to intervene on second round effects; underlying inflation is currently under control.
• ECB's Rehn said inflation expectations are still anchored.
• ECB's Radev said once again, seeing an external price shock.
• ECB's Dolenc said can expect consumer expectations from inflation to rise. Energy prices have a limited effect on the economy for now.
• ECB’s Elderson said banks need to update resilience plans to cater for the higher probability of severe disruptions because of Anthropic’ s Mythos AI tool.
• Riksbank Minutes: Market expectations regarding central bank policy rates have been closely interlinked with the inflation risks stemming from energy prices.
• BoJ will continue to closely monitor how the Middle East situation will affect economy and prices, according to an official.
• UBS sees the Fed to cut 25bps in December 2026 and March 2027 (prev. forecast cuts in September and December).

Fixed Income

• Global benchmarks are incrementally firmer/flat this morning as crude benchmarks pull back from recent highs, and as geopolitical/political newsflow remains light.
• USTs are firmer by a couple of ticks and currently trade within a narrow 109-31+ to 110-04 range, but ultimately residing near the prior day’s trough at 110-01. As a reminder, US paper was pressured on Tuesday amidst higher energy prices and after a hotter-than-expected US CPI report, which has led markets to reprice hawkishly. Most recently, UBS pushed back its call for a cut at the Fed to December 2026 and March 2027 (prev. forecast cuts in September and December). Focus today will be on US PPI and a flurry of Fed speakers.
• Bunds are essentially flat in a quiet 124.59 to 124.87 range. Earlier this morning German Wholesale Prices M/M topped expectations, with the Y/Y figure also rising from the prior. The statistics office cited the war in the Middle East as the region for the jump in prices, “particularly for energy products and raw materials”. Despite the jump in prices, Bunds were choppy but ultimately little moved. Thereafter, EZ GDP 2nd estimate was not subject to revisions, whilst Employment Change Q/Q fell from the prior. No move following the German 2047/2054 auctions.
• Gilts initially gapped higher at the open, peaking at 86.31, as UK paper found some reprieve following on from a dire session seen in the prior session; traders may have also priced in the chance of quiet domestic politics, ahead of the King’s speech. However, since the cash open, UK paper has gradually trundled lower and is now only firmer by a handful of ticks – conforming to the action seen across peers. From a yield perspective, the 10yr remains above the 5% mark and a little short of the peaks made on Tuesday (5.13%).
• Markets remain on watch for domestic politics, and particularly on Wes Streeting after his short meeting with PM Starmer – UK journalists are questioning whether this signals increased likelihood of a potential leadership challenge. Before the duo met, Sky News reported that UK government whips believe Wes Streeting will make his move on Thursday, to avoid clashing with the King’s Speech, while they also believe Andy Burnham doesn’t have an MP ready to quit.

Commodities

• In geopolitics, US President Trump said Iran will either make a deal or be “decimated”, while reaffirming the effectiveness of the blockade. Meanwhile, Iran reiterated five conditions before entering nuclear talks, including sanctions relief, reparations and recognition of sovereignty over the Strait of Hormuz. US intelligence reportedly assessed Iran still retains significant missile capabilities along the Strait of Hormuz. Further, Sources familiar with negotiations said Iran’s top conditions before nuclear talks include ending the war on all fronts, lifting sanctions, releasing frozen funds, compensation for war damages and recognition of Iranian sovereignty over the Strait of Hormuz.
• Elsewhere, the IEA released its monthly oil market report today, in which it forecasts world oil supply to fall by 3.9mln bpd in 2026, assuming Strait of Hormuz flows gradually resume from June (prev. forecast 1.5mln bpd fall); Sees total world oil supply 1.78mln bpd lower than demand in 2026 (vs. prev. forecast 0.41mln bpd higher). IEA noted the war in the Middle East is depleting global oil inventories at a record pace.
• WTI July and Brent July futures have trimmed losses seen overnight, with the former in a USD 96.79-98.58/bbl range and the latter in a USD 106.09-107.56/bbl. Dutch TTF is now flat intraday after recovering from sub-EUR 46/MWh lows to levels north of EUR 46.50/MWh.
• Spot gold resides in a USD 4,685.90-4,727/oz range, well within yesterday’s USD 4,638.36-4,773.58/oz parameter, with the 100 DMA at USD 4,786.96/oz. Spot silver takes a breather from six straight sessions of gains, with the precious metal pulling back a touch after hitting resistance around USD 87.80/oz. Elsewhere, Shanghai Futures Exchange adjusted the price limit for the AG2705 silver futures contract to 17%.
• Base metals are posting varying gains across the board amid a broadly but cautiously positive risk appetite across Europe and US markets, and despite a firmer USD. 3M LME copper resides north of USD 14k/t in a 14,086.58- 14,191.48/t range at the time of writing.
• IEA OMR: world oil supply to fall by 3.9mln bpd in 2026 assuming Strait of Hormuz flows gradually resume from June (prev. forecast 1.5mln bpd fall); Sees total world oil supply 1.78mln bpd lower than demand in 2026 (vs. prev forecast 0.41mln bpd higher). Sees world oil demand falling by 420k bpd in 2026 on Iran war (prev. forecast 80k bpd drop).
• US Private Inventory Data (bbls): Crude -2.2mln (exp. -2.3mln), Distillates -0.3mln (exp. -1.3mln), Gasoline +0.5mln (exp. -2.5mln), Cushing -1.8mln
• US NEC Director Hassett said this is a temporary energy shock and that President Trump is confident the Strait of Hormuz will be open soon, while Hassett said regarding the SPR that they are releasing as fast as possible. Furthermore, he said Trump's view is that we should modernise the gasoline tax.

Geopolitics

• US President Trump posted "When the Fake News says that the Iranian enemy is doing well, Militarily, against us, it’s virtual TREASON in that it is such a false, and even preposterous, statement. They are aiding and abetting the enemy! All it does is give Iran false hope when none should exist."
• "Pakistan’s Foreign Ministry is all set to hold a consultative meeting of its envoys in Middle East, West Asia and important capitals on Thursday in Islamabad", Pakistani journalist Mallick posted.
• Iranian Foreign Ministry spokesman said Iran will obtain a more accurate assessment of the American position through Pakistani mediators, Al ArabyTV reported. Further stated that Tehran rejects maximalist demands regarding its Nuclear Program and considers them unjust.
• Iranian Foreign Minister Araghchi said a lack of good faith and the dishonesty of the US is the most significant obstacle to a definitive end to the war, while he commented that the main cause and origin of the current situation in the Strait of Hormuz is the US and Israeli regime's military aggression against Iran, and subsequently the repeated violation of the ceasefire through the continued blockade of Iran's maritime ports. Furthermore, he said they are holding consultations to draft regulations concerning arrangements for the Strait of Hormuz in accordance with international law.
• Pakistan and Iraq have struck agreements with Iran to transport liquefied gas and oil via the Strait of Hormuz amid shipping risks, according to sources.
• China-flagged supertanker attempts to exit Hormuz, according to reports citing data.
• India, Japan and most European nations joined the Hormuz Strait draft resolution, while 112 countries back the resolution, according to Al Jazeera.
• A group of bipartisan US senators is writing to Secretary of State Rubio to pledge their support for the Taiwan Relations Act, Semafor reported; Twelve senators signed the letter.
• North Korea leader Kim inspected munitions factories and called for modernisation and efficiency gains in the arms industry, according to KCNA.

US Event Calendar

• 7:00 am: United States May 8 MBA Mortgage Applications, prior -4.4%
• 8:30 am: United States Apr PPI Final Demand MoM, est. 0.5%, prior 0.5%
• 8:30 am: United States Apr PPI Ex Food and Energy MoM, est. 0.3%, prior 0.1%
• 8:30 am: United States Apr PPI Final Demand YoY, est. 4.8%, prior 4%
• 8:30 am: United States Apr PPI Ex Food and Energy YoY, est. 4.34%, prior 3.8%
• 11:30 am: United States Fed’s Collins Speaks on US Economy
• 1:15 pm: United States Fed’s Kashkari in Moderated Discussion
• 7:00 pm: United States Fed’s Logan in Moderated Conversation

DB's Jim Reid concludes the overnight wrap

In nearly two decades of writing the EMR it’s rare that I finish it off while watching the sun break through the clouds and go down over an ocean but that’s the scene as I type this evening from the US West Coast. For the amount of times I finish it in the cold and dark, I hope you'll give me this treat! Rest assured there is no glass of wine influencing this daily!

I wish markets were as serene as the view, with increased nervousness that a US-Iran deal looks further away than most would have hoped when the more positive news flow came through a week ago. In response to that uncertainly Brent was up a further +3.42% to $107.77/bbl yesterday whilst WTI (+4.19%) also crossed the $100/bbl threshold to $102.18/bbl. Although we've edged down just under a percent in Asia, we've now edged back above the levels seen before the positive Axios story broke last week that a deal could be imminent. The higher oil price led to a sell-off in fixed income and equities yesterday which wasn't helped by a hotter core US CPI print than the market expected, even if it was in-line with our forecast.

Turning to rates first, that CPI print and worries over sustained costs from a prolonged conflict drove the 10yr Treasury yield (+4.9bps) to 4.46%, its highest since June 2025. The moves were similar for 2yr (+3.7bps to 3.99%) and 30yr yields (+3.9bps to 5.02%), with the latter now just 7bps below the post-2007 high it reached in May last year. That higher US April CPI print showed headline inflation rising +0.6%m/m as expected (+3.8% y/y vs +3.7% y/y exp.) but core inflation slightly beating consensus estimates (+0.4%m/m vs +0.3%m/m and +2.8%y/y vs +2.7%y/y exp.).

In addition to the upside surprise in core, there were a few concerning details within the data. The effects of the Middle East conflict pushed up categories like energy (+3.8% m/m), airfares (+2.8% m/m) and postage and delivery services (+3.5% m/m), while grocery prices (+0.68% m/m) saw their largest monthly rise since 2022. And the Cleveland Fed’s trimmed mean CPI measure came in at +0.43% m/m, its sharpest monthly rise since January 2024. Kevin Warsh has been a proponent of looking more at this measure. Unfortunately it doesn't seem to be moving in the dovish direction he expected. For more on the release and implications, see our US economists’ reaction piece here.
The hawkish market interpretation was later reinforced by comments from Chicago Fed Goolsbee, who said that the print was “worse than expected” with services inflation being amongst the worst affected. In response, the amount of fed hikes priced by next April rose to a new high of 20bps (+6.0bps on the day). The next big watchpoint for the Fed will be today’s PPI report for April, which our US analysts expect to rise +0.5% for headline and +0.3% for core. So that’s a tough inflation backdrop as Kevin Warsh takes over as Fed Chair later this week, with the Senate confirming him to the Fed Board in a 51-45 vote yesterday while the final vote to confirm him to a 4-year term as Chair is expected today.

The hawkish inflation data combined with the Middle East conflict led to a challenging backdrop for equities. However, this also wasn't helped by chipmakers and tech selling off with the Philly Stock Exchange Index falling back by -3.01%, although well off the -6.75% intra-day lows. Elsewhere, the S&P 500 (-0.16%), Nasdaq Composite (-0.71%) and Magnificent 7 (-0.49%) also fell but again bounced off the lows. The S&P 500 was down by -1% at one point, but a partial in tech and a rotation into defensive sectors including healthcare (+1.93%) and consumer staples (+1.56%) helped limit the losses. The mood was more challenging in Europe, with multiple indices declining with the Iran and oil fears. That included the DAX (-1.62%), CAC 40 (-0.95%) and Stoxx 600 (-1.01%), although the FTSE 100 (-0.04%) losses were not as steep.

Staying with Europe, UK politics weighed on bond yields throughout the session. During yesterday’s cabinet meeting, PM Starmer reiterated his call that he would stay on despite the number of MPs wanting Starmer to quit crossing the 81 required to mark a leadership challenge if they coalesced around a candidate. It’s important to note that any calls or letters for Starmer to resign don’t trigger anything unless MPs explicitly back an alternative candidate. So even as four ministers resigned from government yesterday, it does look increasingly possible that he will see this through for now, with Polymarket odds of Starmer leaving by June 30 down to 33% this morning from as high as 80% on Monday night. We have the King's Speech today which sets out the upcoming legislative agenda of the government. With the fate of Starmer still in the balance though, yields on the 10yr yield (+10.4bps to 5.10%) rose to its highest level since 2008, and the 30yr gilt yield (+9.5bps to 5.77%) reached its highest since 1998. Other markets are also at multi-year highs, but the UK has underperformed over most recent periods.

Indeed the 30yr German bund yield also rose to its highest level since 2011 yesterday. We did receive the German May Zew investor expectations, which rose to -10.2 vs -19.5 estimate. So that was not as bad as feared. Elsewhere, 10yr bond yields also sold off across bunds (+6.1bps), OATs (+7.9bps) and BTPs (+9.3bps). So it was an overall rough day for global bonds.

In Asia, the KOSPI (+1.25%) is back to leading the way again, after earlier dropping by -3.0%, while the Nikkei (+0.15%) is edging higher. Chinese related stocks are edging lower with US futures flat and European futures up just over half a percent. Yields on the 20-year JGBs have increased by +4.2bps, trading at 3.49%, surpassing its January peak to reach the highest level since 1997.

Finally, we saw some ongoing headlines around Ukraine and Russia. Putin’s press secretary Dmitry Peskov said it was still too early to talk about "specifics" as he addressed Putin’s comment over the weekend that the war in Ukraine is “coming to an end”. While Ukraine talks have been on hold since January, recent comments may signal an emerging shift in Moscow’s stance amid Russia’s slowing military momentum and rising domestic discontent according to opinion polls. This is more of a slow-burn story but one that saw European defence stocks post a fourth consecutive decline yesterday, with Rheinmetall (-1.99%) falling to its lowest level since March 2025. Those moves also came as CBS News reported a memo outlining terms of a potential US-Ukraine defence deal that would see Ukraine export military tech to the US.

To the day ahead now, data includes US April PPI, Germany April wholesale price index, Eurozone March industrial production, Q1 employment. For Central Banks the Fed’s Collins and Kashkari will speak, as will the ECB’s Lagarde, lane and Radev, and the BoE’s Mann

Tyler Durden Wed, 05/13/2026 - 07:59

Iran Specifies 5 Demands To Restart Peace Talks With US

Iran on Tuesday revealed its demands in a counteroffer to the United States that President Trump shot down on Sunday, which has put the whole conflict and Pakistan-mediated talks in a holding pattern and stalemate, as the Strait of Hormuz remains effectively blocked.

The demands hinge on war reparations, Iranian sovereignty over the Strait of Hormuz and an end to US sanctions - things which the White House balked at, with war reparations especially being focus of rejection by the US side, and the lack of taking up the nuclear issue, which Iran has insisted is a non-starter and would only be dealt with after the war is settled.

via AFP

Trump had previously made clear on Truth Social that "I have just read the response from Iran’s so-called ‘Representatives.’ I don’t like it — TOTALLY UNACCEPTABLE!"

Al Jazeera correspondent Ali Hashem has listed the following five conditions that it sees as the basis for reentering talks:

1. Ending the war on all fronts, including Lebanon

2. Lifting all sanctions

3. Releasing frozen Iranian assets

4. Compensation for war damages and losses

5. Recognition of Iran’s sovereign rights over the Strait of Hormuz

Again, all this according to Tehran must be agreed to while at the same time Iran is pushing back against nuclear negotiations.

In a Monday press briefing Iranian Foreign Ministry spokesman Esmail Baghaei had publicly alluded to several of these, including in his words, "Demanding an end to the war, lifting the blockade and piracy, and releasing Iranian assets that have been unjustly frozen in banks due to U.S. pressure."

Also, there was mention of "Safe passage through the Strait of Hormuz and establishing security in the region and Lebanon were other demands of Iran, which are considered a generous and responsible offer for regional security" - before talks could begin in good faith.

Tehran apparently feels it can weather the tightening economic noose its under, given Tanker Trackers on Tuesday said Iran has not successfully exported any crude oil by sea over the past 28 days.

To our best knowledge, Iran hasn't successfully exported* any crude oil by sea over the past 28 days. Some refined products managed to escape because US OFAC did not slap sanctions on those tankers.

In addition, Kharg Island hasn't loaded any tankers since 2026-05-06 as a result…

— TankerTrackers.com, Inc. (@TankerTrackers) May 12, 2026

Trump, just before his departure to China, remarked to Axios: "Iran will either do the right thing or we will finish the job... we are either gonna make a deal or they will be decimated."

Tyler Durden Wed, 05/13/2026 - 07:55

Anthropic Eyes $30B Raise At $900B Valuation As UBS Says Claude Is "Gaining Ground"

AI is still where the money is flowing...

A Bloomberg report late Tuesday revealed that Anthropic, the maker of Claude, is in early discussions with investors to raise at least $30 billion at an eye-popping valuation of nearly $900 billion.

Clearly, this could become the largest funding round to date for founder Dario Amodei.

The Claude maker is in discussions to raise the new capital at a valuation of more than $900 billion, not including the investment, said the people, who spoke on condition of anonymity as the information is private. The round is expected to close as soon as the end of this month, one person said. The deal is not finalized and no term sheet has been signed. -BBG

Talks of a new funding round at a valuation above $900 billion follow Google's $10 billion investment at a $35 billion valuation earlier this year, with an additional $3 billion contingent on performance milestones. Amazon is also investing $5 billion at the same valuation, with plans to add $2 billion over time.

Anthropic could be poised for an initial public offering as soon as October, according to a separate Bloomberg report.

Earlier, the outlet reported that Anthropic has warned investors about unauthorized sellers of its shares on secondary marketplaces, calling them "stock scams," and that some sellers are issuing fraudulent share certificates.

Anthropic specifically warned about new offerings from secondary platforms Hiive and Forge Global. Anthropic also named Sydecar, Open Door Partners, Lionheart Ventures, UpMarket, Unicorns Exchange, and Pachamama.

Shifting to a new note from UBS about its latest semi-annual Enterprise AI survey, analyst Timothy Arcuri and his team surveyed IT executives at 139 companies about their AI initiatives.

Arcuri found that "the survey continues to point to Microsoft, OpenAI, and Nvidia as the key enterprise AI winners, but with Anthropic gaining ground."

Arcuri added more color about OpenAI, Anthropic, and Nvidia:

The progress made by OpenAI and Anthropic in the enterprise market was evident in this survey.

OpenAI ranked #1 again in terms of the most popular AI model provider to enterprises, #2 for general-purpose AI tools with ChatGPT, and #3 in coding with OpenAI Codex.

Anthropic made solid ground in the enterprise, notably moving into the #2 position in the AI coding arena with Claude Code.

Nvidia remained the dominant choice for AI chips among enterprises, with Google, surprisingly, slipping in several categories. Among the SaaS/apps firms, it was not surprising to see ServiceNow in ITSM AI and Salesforce in CRM AI stand out.

The survey again pointed to strong AI pull-through in data spend, with the most material pull-through for cloud data lakes and analytics, a tailwind for Snowflake, Databricks, and the hyperscalers. We offer our key survey takeaways for the cybersecurity space in a separate note.

Polymarket odds:

//--> //--> Will Anthropic not IPO by June 30, 2026?
Yes 98% · No 2%
View full market & trade on Polymarket

Meanwhile, OpenAI has not set an official IPO date. The latest reporting suggests it has been laying the groundwork for a public listing, with a possible filing in the second half of 2026.

So potentially, in the back half of the year, there will be multiple IPOs of top chatbot startups ...

Tyler Durden Wed, 05/13/2026 - 07:40

Parents Sent To Prison After Isolating Kids For Four Years Over COVID Fears

Authored by Steve Watson via Modernity.news,

A court in northern Spain has sentenced a couple to prison after they kept their three children confined indoors for nearly four years due to intense fears of Covid.

The isolation, which began in December 2021 and continued until the children were rescued in April 2025, left the youngsters with significant mental and physical conditions, including difficulties walking, bowel and bladder control issues, and delayed development.

The case, underscores the profound and lasting effects that pandemic-related anxiety had, and continues to have, on some individuals.

Parents who refused to let their three children go outside their house for FOUR YEARS due to Covid fears, leaving them with extreme mental and physical conditions, are sentenced to prison https://t.co/3XZdGBSRLd

— Daily Mail (@DailyMail) May 11, 2026

Christian Steffen, 53, a German freelance tech recruiter, and his wife Melissa Ann Steffen, 48, an American-born naturalised German, lived in a rented home in Oviedo, Spain. 

Prosecutors stated that the parents “locked the minors up inside their home and isolated them completely from the rest of the world, denying them contact with other people both physically and through other forms of communication.”

They added that “The children didn’t even know their relatives or any other people that weren’t their parents. They never went outside, not even to the garden of their home, for almost four years because of the unfounded fear the accused had, and they had instilled in their children, that they might be infected with something.”

The children — a boy aged ten and eight-year-old twins — were not enrolled in school. They received homeschooling from their parents, had not seen a doctor since 2019, and lived in conditions described as squalid, with soiled nappies, rubbish, and inadequate sleeping arrangements including broken cots for the twins. 

Physical examinations revealed bowed legs, hunched posture, irritated skin, and other issues stemming from prolonged confinement and lack of medical care. After rescue, one child was reported to have knelt on the grass outside and touched it with amazement.

The couple was convicted of habitual psychological violence within the family environment and family abandonment. Each received a sentence of two years and four months in prison, plus an additional six months for family abandonment. 

They were also disqualified from parental authority for three years and four months, banned from approaching the children within 300 metres, and ordered to pay €30,000 in compensation to each child.

Defence lawyers argued that the situation was “voluntary isolation” from the world by parents who had taken a series of “probably wrong but not criminal decisions.” 

They noted that the Steffens had caught Covid and decided to self-confine and educate their children from home out of an “unsurmountable fear” of falling ill again. The parents insisted during the trial that they had always acted in the interest of the youngsters.

A city hall source told El Mundo that a vigilant neighbour, Silvia, raised the alarm after noticing suspicious supermarket deliveries including large quantities of nappies during school hours. She compiled a detailed dossier that led to a police investigation. 

Regional Social Rights and Welfare Minister Marta del Arco commented: “These are children whose trauma from what they experienced was bound to surface later on, and both educators and psychologists are working very intensively with them because they really need it.”

This case reflects how deeply some individuals were affected by the fear surrounding Covid-19. While most adapted as restrictions eased, a small number internalised the risks to an extreme degree, with tragic consequences for their families.

The incident comes as researchers continue to examine the wider psychological and developmental effects of the Covid era. 

A March 2026 study from the University of East Anglia found that Covid lockdowns may have permanently damaged children’s brain development, particularly executive functions such as behaviour regulation, focus, and adaptation. 

Professor John Spencer noted: “Children who were in reception when the country shut down showed much slower growth in key self-regulation and cognitive flexibility skills over the next few years than children who were still in preschool.” The study highlighted the critical role of peer socialisation during key early years.

Recent analyses, including a January 2026 international study on long Covid, have shown varying reports of brain fog, depression, and cognitive issues linked to the pandemic period, influenced by cultural and healthcare factors. 

Broader surveys from organisations like the WHO and Mayo Clinic have documented elevated levels of anxiety, depression, and stress persisting years after the initial outbreak, affecting both adults and children worldwide.

The Oviedo case illustrates an extreme outcome of that widespread fear environment. While the parents have been held accountable by the court, the episode serves as a stark reminder of the human cost when anxiety overrides normal family life and child development needs. 

As support services work with the affected children in Spain, the findings from ongoing research emphasise the importance of monitoring and addressing the long-term legacy of the pandemic on younger generations.

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Tyler Durden Wed, 05/13/2026 - 07:20

The Overhyped Nuclear Hazard America Has Mastered

Nuclear waste remains one of the most misunderstood aspects of modern energy production in the United States. Critics continue to portray it as a dangerous, unsolvable problem, yet the country has managed it safely and effectively for decades with an impeccable safety record. 

Spent fuel from commercial reactors sits securely in pools and dry casks at more than 70 sites across 35 states. Transportation casks have traveled millions of miles without any releases. Not that there was ever a concern for one of these casks breaking open, considering their testing involves being dropped from helicopters and struck by a rocket-propelled locomotive...

Nuclear waste shipping casks have been through a hell of a lot of testing. Now with Red Alert music. pic.twitter.com/D28AgF9Zgp

— Nick Touran (@whatisnuclear) January 17, 2026

France reprocesses the vast majority of its used fuel, demonstrating viable technology at commercial scale. In the United States, no significant radiation releases have occurred from commercial nuclear waste storage or handling in over half a century.

We previously covered Visual Capitalist's depiction of nuclear waste around the world and how the most dangerous waste represents less than a quarter of one percent of the total nuclear waste. 

A recent Utility Dive article highlights shifting approaches to this issue and examines the Department of Energy’s proposal for “Nuclear Lifecycle Innovation Campuses.” These facilities would manage the entire nuclear fuel cycle, including reprocessing or recycling of the nation’s approximately 95,000 metric tons of spent fuel, which increases by roughly 2,000 tons each year. 

The campuses aim to combine waste management with regional economic benefits, creating long-term jobs and revenue streams for host states. Interest has already emerged from several states, including Utah, South Carolina, Tennessee, Washington, Idaho, and Nebraska.

TN is the global epicenter of nuclear energy, & we're grateful for a new opportunity to lead the nation with a proposal to locate a @ENERGY Nuclear Lifecycle Innovation Campus in Oak Ridge.

Link: https://t.co/019O2Hu3Sc pic.twitter.com/26NfsQahP4

— Gov. Bill Lee (@GovBillLee) April 2, 2026

U.S. taxpayers currently bear the costs for waste management and legacy cleanup. The DOE’s Environmental Management program operates with an annual budget exceeding $8 billion, while the federal government’s liability for permanent disposal now stands at more than $56 billion. The Trump administration also recently asked for an expansion of the funding. 

Yet this material increasingly looks like a valuable resource rather than solely a liability. Private companies are beginning to compete aggressively for access to spent nuclear fuel. The DOE recently awarded over $19 million to firms including Oklo, Curio Solutions, Flibe Energy, and SHINE Technologies to advance recycling, transmutation, and isotope-harvesting technologies. 

Startups view the material as a feedstock for new reactor fuel, medical isotopes, and industrial applications rather than waste. As demand grows for high-assay low-enriched uranium (HALEU) and specialized isotopes, competition for this resource is expected to intensify.

Nuclear waste is incredibly hazardous, if mishandled. But, America has not mishandled it. With private-sector innovation now treating spent fuel as a strategic asset, the longstanding “problem” is transforming into an economic opportunity.
 

Tyler Durden Wed, 05/13/2026 - 06:55

Britain Is Pricing Its Factories Into Oblivion

Authored by Ted Newson via CapX,

At its peak, Britain was known as the workshop of the world. Sheffield produced high-quality steel, Manchester still had a strong textiles sector and the West Midlands was world-renowned for its cars. Glasgow, Sunderland and Newcastle were shipbuilding hubs, Stoke-on-Trent produced ceramics.

Cities around Britain provided steady employment for skilled tradespeople, keeping communities together and wealth distributed around the country. In the 1980s and ’90s, this was underpinned by looser employment regulations and strong energy security through North Sea oil and gas. Businesses could hire who they wanted, for a wage they were comfortable paying and without soaring energy bills to worry about. Just ten years ago, electricity prices were around £31/MWh, today they have almost tripled to around £90/MWh. When competitors such as the United States don’t have a nationwide carbon tax while Britain has had a carbon price floor since 2013, it is easy to see how business can quickly become uncompetitive.

Britain’s industrial sector was promised lower energy bills through renewables; instead, it is paying higher prices and additional taxes to subsidise green policies. The Climate Change Committee recently forecast offshore wind electricity prices of £35/MWh by 2040, the reality suggests that this is unlikely. Using intermittent renewables to power energy-intensive industries brings with it its own problems, creating high energy prices in wind and solar droughts when domestic firm power isn’t readily available.

Even by 1990, around one-sixth of Britain’s GDP came from the manufacturing industry. The country was still in the top five global manufacturing powers and possessed competitive steel, car, and chemical industries. At this time, our industrial energy prices were reasonably similar to the rest of Europe, with allies like Germany and Italy paying more than the UK. Today, the UK’s industrial energy prices have risen by 669 percent—dwarfing increases of 389 percent in Germany and 544 percent in Italy. A driving force behind this is underinvestment in reliable electricity generation and the idealistic belief that intermittent renewables, backed up by government subsidies, can replace firm sources of power such as coal and gas.

In the pursuit of lowering carbon emissions, Britain has abandoned its manufacturing sector. As we have artificially inflated energy prices through policy costs and made employing people harder, our industries have shifted to countries with more business-friendly environments. While rising comparative wage rates naturally encourage industry to shift overseas, the British government has further pushed industry away through deliberate choices. This has created job losses and regional decline as former manufacturing towns lose historic businesses.

Energy-intensive industry such as steel manufacture cannot survive when industrial energy prices are four times that of the United States. In fact, Britain has the fewest steel plants left in the G7, with plummeting production capabilities, especially for virgin steel. No matter how low other input costs are, such high energy costs will repel investment. A recent example of this is the collapse of the long-established pottery firm Denby. While Britain remains gifted with abundant, high-quality clay, energy prices and the transition to electric kilns have rendered the sector unsustainable.

This problem is much the same across the rest of Britain’s manufacturing sector. Energy prices drive up unit costs, before government legislation further entrenches high wage bills and punitive taxes. From every direction, the business sector is attacked—and manufacturers, as the most energy-intensive type of industry, are most exposed. Britain’s deindustrialisation has many causes, but shortcomings in energy and workforce policy go a long way toward explaining why many once-prosperous enterprises are now shutting down. Britain has already lost a significant share of the manufacturing capacity that once formed the bedrock of its economy and national security, and the decline continues.

That does not mean more government is the answer. A laissez-faire approach to workforce policy was a key reason behind the prosperity of Britain’s manufacturing sector as late as the 1990s. Industrial towns created reliable paths into work for young people without the need for state intervention, strengthening communities and keeping regional employment rates across Britain healthy.

It is government policy that keeps getting in the way. A rising minimum wage has pushed businesses to cut back on hiring, while post-1990s legislation has made it easier to unionise, harder to fire staff, and capped working times. This has increased staff costs and has made turnover harder, slowing the jobs market.

An advanced economy can typically rely on productivity gains to offset higher energy prices and wage rates. However, Britain’s dismal productivity growth in recent years, compounded by chronic underinvestment, has made that much harder to achieve—and the scale of recent energy price increases has rendered those traditional offsets inadequate. Even advanced industries such as pharmaceuticals and chemicals are now considering moving abroad. This risks losing jobs and undermining strategic domestic production.

Bringing back manufacturing to Britain is by no means an easy task. But prioritising low energy prices, on-the-job training and less heavyhanded labour regulation would allow sustainable businesses a fighting chance. Only by significantly improving our industrial competitiveness can we have any hope of bringing back Britain’s great industries of the past.

Tyler Durden Wed, 05/13/2026 - 06:30

Ukraine, U.S. Draft Defense Deal To Supercharge America's Kamikaze Drone Production

U.S. and Ukrainian officials have drafted a memorandum that could open a formal channel for Kiev to export battle-tested war technology to the U.S., while also easing the path for U.S. defense firms to form joint ventures with Ukrainian "war unicorns" to mass-produce low-cost, one-way attack drones.

The report comes from CBS News, citing three sources familiar with the matter, who say U.S. State Department officials and Ukraine's Deputy Prime Minister for European and Euro-Atlantic Integration, Olha Stefanishyna, are working on a new defense deal that would capitalize on innovations forged during the four-year grinding war in Ukraine, such as FPVs, AI kill chains, ground robots, drones, and other low-cost technologies that are now proliferating around the world.

Two weeks ago, we pointed out that it was inevitable that Ukrainian drone and counter-drone technologies would soon be exported to the U.S. We tracked U.S.-based Axon's investment deal flow with Ukrainian firms, which suggested this technology was inbound for the U.S. market. Axon's angle is selling to police forces nationwide.

We also noted that the passive acoustics early-warning counter-drone sector is going to heat up (read here), especially in the era of data centers. There are Ukrainian firms with battle-tested counter-UAS systems that the U.S. badly needs.

Also, last month, we joked that Ukrainian President Volodymyr Zelensky went full "Lord of War" and could become the world's top dealer of low-cost drone interceptors.

To our amazement, the U.S.-Iran conflict appears to have accelerated this:

• Zelensky Touts That 20 Countries Seek Ukraine Drone Deals

We noted last month:

Ukraine's capital markets have been frozen by war, leaving many of the country's battlefield-proven "war unicorns" starved of traditional funding. However, the Middle East conflict has accelerated a new export pathway, as drone warfare and AI-enabled kill chains reshape how militaries think about defense.

This is exactly what the CBS report said:

Drone collaboration with the U.S., Ukrainian officials told CBS News, would be mutually beneficial, as American financing would help both countries expand their defense production output.

Our view is that a flood of Ukrainian defense firms will transfer battlefield-proven technologies into the U.S. market, tap into deep pools of capital, and leverage underused industrial capacity to scale production of low-cost attack drones and interceptors - this is exactly what the Department of War wants.

This comes as Russia, China, and a growing list of countries race to stockpile drones and interceptors before the next major conflict.

Tyler Durden Wed, 05/13/2026 - 05:45

Report Exposes Shocking Explosion In EU Sex Crimes

Authored by Steve Watson via Modernity.news,

A horror report has laid bare the EU’s staggering rise in sex crimes over the last decade. Sexual violence offences have nearly doubled since 2014, while recorded rapes have surged 150 per cent. 

Around 1.9 million sexual offences were logged between 2015 and 2024 alone, with 256,302 occurring in 2024. Between 2015 and 2024, EU authorities recorded 664,293 rapes. The vast majority of victims were women.

The findings, compiled by The Campaign for an Independent Britain, Stand for Our Sovereignty, and think tank Facts4EU, tie directly into the migration crisis that began in 2015 under Angela Merkel. 

Horror report lays bare the EU's staggering rise in sex crimes as fears soar over PM opening the floodgates https://t.co/7HmFYG6JCr

— GB News (@GBNEWS) May 11, 2026

Critics warn that restoring any form of freedom of movement could import the same wave of violent crime the continent is now battling.

The report’s authors note the sharpest increases coincide with the 2015 migration surge, though they caution that definitions and reporting practices vary by country. 

Trends, however, do not lie. Sexual violence offences jumped 94 per cent between 2014 and 2024. Rapes rose 150 per cent in the same period.

This latest report matches what we have already documented. Rape reports in Spain have surged by a whopping 322 per cent over the last decade.

The pattern repeats in Germany, where foreigners are vastly overrepresented in violent crimes and rape cases have risen 72 per cent since 2018.

This data comes as Keir Starmer faces fresh pressure not to fling open Britain’s borders through any EU “reset.”

Starmer’s government lost control of more than 30 councils and around 1,500 councillors last week. Rather than double down on secure borders and British sovereignty, he is eyeing a Brussels reset that could expose the UK to the very crime wave now engulfing the EU.

Britain has struggled with rising sexual offences linked to illegal migration and certain communities, but re-entering EU free-movement schemes would only make the problem worse. 

Starmer’s talk of “a new direction for Britain” at the upcoming EU summit has sovereignty campaigners on high alert. After Labour’s heavy local election losses, opponents fear he will trade Brexit red lines for single-market access – and that price could include renewed freedom of movement.

The message from this latest batch of stats is clear. Unchecked migration from cultures that do not share Western values on women’s safety leads to more rapes, more sexual violence, and more shattered lives. 

Sovereignty, secure borders, and putting your own citizens first are not optional extras – they are the bare minimum required to protect women and children.

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Tyler Durden Wed, 05/13/2026 - 05:00

Germany's Nuclear Confession Is A Crack In Net‑Zero Pretense

Authored by Vijay Jayaraj via PJMedia.com,

German Chancellor Friedrich Merz has called the nuclear phaseout a “serious strategic mistake” that left Germany short of firm power that turned the Energiewende into the most expensive energy transition on the planet. This is an early marker for a developing worldwide retreat from policies that sidelined nuclear power and demonized coal, oil, and natural gas.

German and Japanese Nuclear Embarrassment

Germany stubbornly closed its last three functioning nuclear reactors in April 2023 right in the middle of a crippling energy crisis triggered by the war in Ukraine. As pragmatists predicted, German citizens now suffer under punishingly high electricity prices and remain heavily dependent on imported energy.

The green dream was sold as a route to “cheap” renewables, yet the reality for German households and factories has been record‑high electricity prices, complex subsidies for favored businesses and individuals who conform to the climate narrative, and a grid that struggles on windless days or under gray skies. 

Japan made a remarkably similar error but is finally correcting course. After the Fukushima disaster, the government panicked and shut down all 54 of its nuclear reactors. Today, Japan is slowly restarting those idle units.

The pattern is plain to see. Countries abandon dependable power sources under political pressure, then spend years rebuilding what they had demonized and dismantled.

Regret Over Abandoning Fossil Fuels

This is why I anticipate a cascade of similar reversals by national leaders who participated in a destructive campaign that stripped grids of dependable, affordable, and abundant coal, oil, and natural gas.

Politicians are already quietly hitting the brakes on their aggressive fossil fuel phaseouts when reality bites. The massive Groningen gas field was scheduled for permanent closure due to localized earthquake risks. Yet in 2024, the Dutch Senate delayed the final shutdown vote when lawmakers demanded guarantees that abandoning the domestic resource would not jeopardize energy security.

Within a week of the German chancellor’s admission of a nuclear energy fiasco, the country’s energy minister lamented at an oil and gas conference the push of net zero policies, indirectly referencing the abandonment of fossil fuels.

In the United States, President Donald Trump took executive actions aimed at preventing some coal plants from closing, including orders that kept aging facilities like the J.H. Campbell plant in Michigan running to “avoid summer blackouts.”

South Africa’s Mineral Resources and Energy Minister Gwede Mantashe consistently fights international pressure to quickly abandon coal. “You don’t destroy what you have on the basis of hope that something better is coming,” he says. Mantashe rightly insists that protecting the ability of the state to supply energy must remain a priority.

India offers the most powerful example of this energy pragmatism. The country has signaled that coal will remain the backbone of the economy for decades, even as its diplomats make empty promises about reaching net-zero by 2070. Deputy Power Minister Shripad Naik recently revealed that India had added a massive 7.2 gigawatts of new coal capacity in the 2025–26 fiscal year alone and would add 307 gigawatts of total coal capacity by 2035.

A majority of Western countries, especially in Europe, utterly lack this basic foresight on energy security. Many countries have locked in policies that tear down coal, oil, gas, and nuclear plants before they have built credible alternatives. They chase targets for emissions reductions. They downplay the costs to their citizens.

Energy security has become more prominent in the news because of turmoil in the Middle East. Yet a war may not be needed to launch the next generation of energy crises. When the next prolonged cold spell, drought, or demand surge hits, the weakness of the anti-fossil fuel approach will show up in higher bills, rolling blackouts, and public anger.

Tyler Durden Wed, 05/13/2026 - 03:30

Russia Successfully Tests Troubled SATAN II, Will Enter Combat By Year's End

Russia on Tuesday announced that it has successfully completed a test of the "Sarmat" intercontinental ballistic missile (ICBM), a new 'doomsday' weapon which has had a troubled roll out and development, but which has not yet been fully deployed as part of Russia's military arsenal. 

While in 2023 the cutting edge heavy missile was reportedly put on 'combat alert' - according to some headlines at the time - the following year saw at least one test deemed unsuccessful and a failure. This was seen as delaying its full combat deployment.

Image source: 112 Ukraine

Interfax was the first to report Tuesday's new Sarmat test, with Russian President Putin in follow-up remarking that its range could exceed 35,000. And Reuters has followed with:

Russia has ​successfully tested ‌its new Sarmat intercontinental ​ballistic missile, ​Sergei Karakayev, the ⁠commander ​of the strategic ​missile forces, told Russian President ​Vladimir ​Putin on Tuesday. Putin said ‌that ⁠Russia planned to put the ​Sarmat ​on ⁠combat duty by ​the end ​of ⁠this year.

The nuclear-capable Sarmat ICBM was previously touted by President Putin as being capable hitting "any target on Earth" - and is widely believed to be by far the longest-range missile in Russia's arsenal (or in the world for that matter). It's been nicknamed by NATO the "SATAN II". 

The Sarmat, which is in a "superheavy" class of missiles, has a short initial boost phase which gives it better ability to elude all conventional anti-missile defense systems, given this results in a much smaller window of time to track it. By design, its super long-range gives it the ability to reach targets thousands of missiles away in the United States or Europe.

According to its specifications, it's by far the heaviest missile Russia possesses - at over 200 tons - and heavier than all foreign competitors: 

This allows it to carry around 15 warheads, up to 750kt. (The bomb US dropped on Hiroshima was 15kt.)

This would be enough to wipe out a country the size of France. It can also carry hypersonic missiles, rendering most missile defense systems ineffective.

It has long been in development - since 2009 - and has been in testing phase for many years, some test flights of which may have failed. The Sarmat has been touted as being able to reach speeds of nearly 16,000 mph.

Putin early in the program described: "The new complex has the highest tactical and technical characteristics and is capable of overcoming all modern means of anti-missile defense. It has no analogues in the world and won't have for a long time to come."

❗️ President Putin Receives Report on Successful ‘Sarmat’ Intercontinental Missile Test – Kremlin

The successful launch will allow the first regiment to be put on duty by the end of the year, according to the commander of the Strategic Missile Forces.

📹: Russian MoD pic.twitter.com/6euvdKssds

— RT_India (@RT_India_news) May 12, 2026

But despite this rosy presentation of the Sarmat's purported capabilities, it has faced an uphill battle from the start, and there were manufacturing problems being reported even nearly a decade ago. For example:

The heavy, liquid-fueled Sarmat ICBM is being developed as a replacement for Russia’s older R-36M missile (NATO Reporting name: SS-18 Satan). The Sarmat’s large payload will allow for up to 10 heavy warheads or 15 lighter ones, or as many as 24 hypersonic Yu-71 glide vehicles (Sputnik News, June 11, 2016). Production of the new missile and its prototype was entrusted to the Krasnoyarsk Machine Building Plant (Krasmash), which suffers from serious equipment depreciation issues—in 2010, fewer than 20 percent of machines at its fabrication facility were less than 20 years old (T. V. Yankova, A. M. Ragozina, “Techno-Economic Justification of Equipment Modernization at Krasmash,” Actual Problems of Aviation and Cosmonautics, No. 6: 2, 2010). The quality and lead time of the order will depend on the modernization of the production facilities at Krasmash. Efforts toward this end have already started: more than 16 billion rubles ($274 million) will reportedly be invested by 2019. And Defense Minister Sergei Shoigu has taken a personal interest in making sure these modernization goals are met.

But by now the Kremlin is stressing that prior troubles have been resolved and smoothed out, and that this nuclear-capable beast is set to be the heavy ballistic long-range missile of Russia's future defense.

Tyler Durden Wed, 05/13/2026 - 02:45

EU Targets France's Jordan Bardella With Fraud Probe As His Anti-Migration Party Surges In The Polls

Via Remix News,

Last week, reports that the European Public Prosecutor’s Office (EPPO) is investigating France’s right-wing, anti-migration party National Rally (RN) for misallocation of EU funds made the rounds. At its core, the case involves a complaint filed last December by the association AC!! Anti-Corruption with the National Financial Prosecutor’s Office (PNF) in Paris. 

These allegations have already been contested by RN, but the party must also now face scrutiny from Brussels, as the funds involved include EU money.

The charge is that the National Rally misused the funds by allocating money received for media training for its leader, Jordan Bardella, not for his work as an MEP, but with the aim of helping him to prepare for France’s 2027 presidential election. Other members of the party have also been named in connection with the same charge.

Bardella posted on X that the investigation is not news and certainly nothing new for the party, labeling the charges as politically motivated slander.

Nous n’avons strictement rien à nous reprocher. L’association à l’origine de la plainte est une organisation d’extrême-gauche revendiquée, dont les déclarations agressives laissent peu de doute quant à leurs intentions.

J’ai déposé plainte il y a plusieurs semaines pour… https://t.co/GNkyGB5lbd

— Jordan Bardella (@J_Bardella) May 7, 2026

“We have absolutely nothing to reproach ourselves for. The association behind the complaint is a self-proclaimed far-left organization, whose aggressive statements leave little doubt as to their intentions. I filed a complaint several weeks ago for slanderous denunciation,” he wrote, while assuring that he and his party would fully cooperate with the EPPO.

National Rally has been in the top spot in recent polling, despite its former leader, Marine Le Pen, having been sidelined by a similar case last year. She is appealing that decision, but for now has made it clear that Bardella will run on the RN ticket for president.

The party’s popularity, with or without Le Pen, cannot be a surprise to its rivals, given the slew of issues France has been suffering from due to its policy of mass immigration and lax deportation: Elderly rape, minor prostitution, failing education, robberies, violent rape, concerns over sharia law, and murder. As the mother of 18-year-old Théo, who was stabbed to death by a Senegalese migrant who ended up avoiding prison, said: “You can kill in France with impunity.”

Meanwhile, the media and the left prefer not to draw attention to the link between increased migration and violence.

And yet, a new website and real estate browser extension for Chrome is offering data on immigration levels, insecurity, and Islamization rates of neighborhoods for prospective buyers in the latest sign that the French public is highly concerned about record-breaking numbers of immigrants.

According to a recent ifop poll, 60 percent of French believe there is “a replacement of the French population by non-European populations, mainly from the African continent.” The same poll found that 66 percent see it as a bad development. Only 9 percent noted it as good.

This is a major factor why the National Rally has been surging in the polls, and why left-wing parties and activist organizations will do anything to bring them down — first targeting Le Pen and now Bardella. Other party politicians and staff members have been implicated in both cases.

Such efforts are not unique to France, with efforts ongoing for years over in Germany to bring down the anti-migration AfD party, which has also seen a massive rise in popularity.

With reports indicating France is spending over €2 billion a year on housing and healthcare for asylum seekers and illegal migrants, RN’s rivals will need more than accusations of misappropriated funds to stop voters from exercising their desire for change.

Read more here...

Tyler Durden Wed, 05/13/2026 - 02:00

India More Than Doubles Gold, Silver Tariffs To Defend Crashing Rupee

One day after vehemently denying speculation that India plans to raise duties on gold and silver imports following ​Prime Minister Narendra Modi's urging people to ​avoid buying ​gold for a year ‌due ⁠to the impact of the Iran war, India did in fact raise import tariffs on gold and silver in an attempt to defend its currency, a surprise move as the country races to limit the damage from the Middle East war and to shore up foreign-exchange reserves.

The government has more than doubled import taxes on gold and silver to about 15% from 6%, according to two official orders, imposing a 10% basic customs duty alongside a 5% agriculture infrastructure and development levy.

The hikes, aiming to dampen demand in the world’s second-largest bullion market, followed a rare weekend appeal from Prime Minister Narendra Modi in which he urged citizens to forgo gold purchases as well as unnecessary foreign travel in order to help hold up the currency. The Indian rupee has plunged more than 6% in 2026 with most of the losses occurring after the Iran war started; the currency is on pace to drop to 100 vs the US dollar in the coming weeks.

New Delhi is also weighing other emergency steps, including raising fuel prices and curbing non-essential imports like electronic goods.

India, the world’s third-largest oil importer, has been hit hard by the inflationary shock caused by energy disruptions in the Persian Gulf. 

Higher import bills have driven sharp foreign-exchange outflows, pushing the rupee down to a record low and prompting the Reserve Bank of India to step in and sell dollars. And the fact that gold is the country’s largest import item after crude oil does not help, which is why India is doing everything in its power to limit capital outflows. 

Gold is deeply ingrained in Indian culture and plays a vital role in savings, weddings and religious festivals. India meets almost of all its demand through imports, with 710 tons of gold coming in last year. 

Of course, attempts by the government to limit capital outflows via precious metals will only encourage the population to find alternative mechanisms to preserve purchasing power, and it is only a matter of time before India joins the rest of the financially suppressed developing world in actively pursuing such non-fiat alternatives as tether and bitcoin if the traditional gold and silver pathways are limited. 

Tyler Durden Wed, 05/13/2026 - 01:03

Altman Fires Back At Musk During OpenAI Trial Testimony

OpenAI CEO Sam Altman spent roughly four hours on the witness stand Tuesday defending the company’s shift from a nonprofit to a for-profit model, directly rebutting Elon Musk’s claims that he and co-founder Greg Brockman “stole a charity” when they restructured the artificial intelligence lab.

"I think it’s wonderful that through the hard work of thousands of people … we’ve been able to create one of largest nonprofits in the world, [and] that it has this role to protect the technology and the impact on the world," Altman told the court. 

The testimony came during the third week of Musk’s federal lawsuit against Altman, Brockman, and OpenAI in U.S. District Court in Oakland, California. Musk, who helped found OpenAI in 2015 but left its board in 2018, accuses the pair of betraying the original mission to develop safe AI for humanity after he provided tens of millions in early funding. He is seeking Altman’s and Brockman’s removal from leadership, more than $150 billion in damages, and the unwinding of OpenAI’s 2019 conversion to a for-profit structure now backed heavily by Microsoft. Musk has accused the pair of bilking him out of $38 million in donations, then restructuring the nonprofit lab they coufounded by exclusively licensing their flagship product to Microsoft. This, Musk's team argues, betrayed OpenAI's founding mission to operate an open-source charity that would counter the existential risks of profit-driven AI. 

Altman told the jury that Musk had pushed for significant personal control from the outset, including an early proposal that he receive 90 percent equity in the company - an idea Altman said made him “extremely uncomfortable.” He also rejected Musk’s suggestion of a merger with Tesla, saying it would have compromised OpenAI’s independence because “Tesla needs to serve its customers and sell cars.”

On the central issue of the for-profit conversion, Altman testified that Musk either supported the move or did not oppose it. “Quite the opposite,” he said when asked whether Musk had resisted the change. Altman portrayed Musk’s current lawsuit as driven by “sour grapes” after Musk launched the rival xAI lab, attempted to poach OpenAI researchers, and engaged in what Altman described as “business interference.”

Musk, meanwhile, told the court "You can’t just steal a charity."

Altman shot back when his turn came: "No, you can’t steal it, but Mr. Musk did try to kill it."

As the Epoch Times notes further, Altman said Musk abandoned the company in 2018 to start his own for-profit competitor, xAI, when other founders rejected his bid to take full control of the operation.

“I thought incredibly highly of Elon, and felt like he had abandoned us, not come through on his promises,” Altman said, suggesting Elon’s withdrawal of support jeopardized the mission. “We were left for dead.”

He acknowledged Musk was a critical contributor but added, “I also wish he would stop doing what he is doing here, which in my opinion is jealousy as we get more and more successful.”

In the bitter feud between the former friends and cofounders, which in recent years has unfurled on social media, both volley accusations of betrayal, double-dealing and hypocrisy.

Altman on Tuesday described his tumultuous tenure at OpenAI’s helm as painful and difficult, its successes unimaginable just a decade prior.

The once-embattled and underfunded nonprofit startup, founded in 2015, was recently valued at $852 billion following a 2025 restructuring as a public benefit corporation, in which the nonprofit arm received a 26 percent stake in the for-profit, based on a transfer of intellectual property. Microsoft, following $13 billion in investments since 2019, currently owns a 27 percent stake in the company.

‘Hurt and Angry’

Of the circumstances surrounding his chaotic 2023 ouster by former nonprofit board members, who at the time cited his “consistent pattern of lying” and concerns over safety protocol issues, Altman said it was one of the most painful moments in his life.

“I had poured the last years of my life into this. I was watching it about to be destroyed. … I was very angry and hurt and upset. It felt like an incredible betrayal,” he said, noting he could have made a lot of money and had a “much easier life” if he had gone to work for Microsoft.

Microsoft CEO Satya Nadella testified Monday that at the time, he offered to create an AI project for Altman, Brockman and any potentially departing employees, in an effort to prevent the wholesale implosion of OpenAI—and along with it his company’s formidable investments.

Musk alleges Microsoft “methodically entrenched itself” into OpenAI, helping to engineer the 2023 “coup” and seize the company’s board of directors.

Altman returned to OpenAI just days later, at the board’s invitation, he said, because he “cared about the mission and the people,” and thought it would be the last chance to create an AI lab with OpenAI’s unique mission and structure.

“I was not trying to deceive the board,” Altman said. “I was certainly not trying to do anything other than make safe AI and distribute it to humanity. I feel badly for the misunderstandings … but that was never my intent.”

In court Tuesday, Steven Molo, an attorney for Musk, pressed Altman about his conditions for return, which included firing the original board—and vetting a new one with Nadella’s approval. 

Musk is suing Microsoft for aiding and abetting OpenAI’s breach of a charitable trust, allegations Nadella disputed when he testified May 11 about his involvement in the messy 2023 shakeup and a landmark financial agreement between the two companies the same year.

Power Struggle

Following a 2017 milestone demonstration of OpenAI technology at a gaming event, the founders realized they had a chance at becoming competitive but would need significantly more capital and computing power to take on Google, at the time an undisputed leader in the field.

Each floated various ideas for profit and nonprofit configurations; Musk at one point suggested rolling OpenAI into Tesla. Throughout late 2017 and early 2018, discussions became more contentious as the power struggle between Musk and Altman intensified.

At one point, Altman said, Musk suggested giving himself a 90 percent equity stake in a for-profit entity; Musk meanwhile, pointed out that he proposed taking an initial majority stake that would be diluted with additional investment over time.

Altman said Tuesday that Musk contributed only 28 percent of the nonprofit’s funding from 2015 to 2020, and failed to come through on a $1 billion pledge, leaving the startup with few options.

Molo pressed Altman, suggesting he had a “fixation” with being CEO. The attorney referenced an email from Brockman and fellow cofounder Ilya Sutskever during the period of intense negotiations over the future funding and structure of OpenAI.

“We don’t understand why the CEO title is so important to you. Your stated reasons have changed, and it’s hard to really understand what’s driving it,” the two wrote. “Is AGI  your primary motivation? How does it connect to your political goals?”

Artificial General Intelligence refers (AGI) generally refers to the theoretical point at which machine “intelligence” meets or surpasses human cognitive abilities and can operate autonomously, which many experts view as an existential threat to humanity. Musk cites the risks of runaway AGI as the express motivation for founding OpenAI.

Altman on Tuesday said, by way of explanation, “I was thinking about running for governor at the time.”

Molo challenged OpenAI’s contention that its nonprofit board has control of OpenAI’s for-profit ventures and governance.

In a poignant moment, the plaintiff’s attorney played a brief clip of Altman’s 2024 appearance on a popular podcast, in which he appears to acknowledge former board members’ contentions that he maintained de-facto control over the nonprofit’s board of directors, and impeded their ability to carry out their duties.

Asked on the podcast if he trusted himself with the kind of power that will come with being first to develop AGI, Altman paused and said he was going to offer a standard response about how no one person should have total control over AGI.

“I think you want a robust governance system,” he said, noting a number of issues related to “our board drama.”

“But as many people have observed, although the board had the legal ability to fire me, in practice it didn’t quite work. And that is its own kind of governance failure,” he said.

Under re-direct by OpenAI attorney William Savitt, Altman clarified the outgoing board technically fired him, rehired him, and appointed a new board.

Toxic Management Style

Altman said he was “annoyed” when Musk resigned from the OpenAI board in 2018 to pursue his own AI venture.

“He really had lost confidence in the organization and did not believe we were going to be successful. … And he didn’t want to be associated with something he couldn’t control,” Altman said.

That left questions about funding gaps, competition and, Altman said, whether Musk would “take revenge” on his former cofounders.

“I don’t think Mr. Musk understood how to fund a good research lab,” Altman said, noting he had “demoralized” some of the company’s most key researchers, including by suggesting they be ranked by accomplishments.

Musk’s management style, he said, may work in other industries, but upset the culture in a fledgling, frontier lab where people needed “psychological safety” and long periods of time to develop their work.

Reaction to his departure, Altman said, was mixed. It introduced instability but also provided a “morale boost.”

Challenging Altman's Credibility

Musk’s lawyer, Steven Molo, hammered Altman - citing prior testimony that described a “toxic culture of lying” at OpenAI and statements from former executives who questioned Altman’s trustworthiness. He repeatedly asked whether Altman had misled people in business dealings. Altman responded that he believed he was “an honest and trustworthy business person,” while acknowledging there had been times he had not told the full truth and that he had heard others describe him as a liar.

Molo also highlighted Altman’s personal financial interests, including a roughly $1.7 billion stake in Helion Energy, suggesting potential conflicts during OpenAI’s negotiations. Altman’s own lawyer, William Savitt, focused on Altman’s commitment to the company, including his decision during the 2023 board crisis to return rather than leave for Microsoft. Altman described that choice as being willing to “run back into a burning building to save it.”

Musk did not remain in the courtroom for Altman’s testimony - while closing arguments are expected on Thursday. An advisory jury may begin deliberations shortly afterward, though the judge will ultimately decide any remedies.

The case centers on whether OpenAI’s leaders violated a charitable trust when they created a for-profit subsidiary in 2019 to attract talent and capital. OpenAI maintains that Musk was aware of and supported the restructuring at the time. Musk argues the conversion enriched Altman and Brockman at the expense of the original nonprofit mission.

Brockman’s private journal - awkward...

One bit of awkwardness; During Brockman’s testimony last week, hundreds of pages from his personal journal - kept since 2010 - were introduced as evidence. The entries, written in 2017, captured Brockman’s internal debate over balancing financial pressures with OpenAI’s founding mission and his uncertainty about Musk’s role and intentions. One entry from November 2017, labeled Exhibit 161, was written before and after a key meeting with Musk and has been frequently cited by both sides.

The journal first surfaced in January during the discovery phase of the case. Musk’s legal team obtained the full document and began questioning Brockman about specific passages during his deposition. OpenAI tried to keep large portions sealed, arguing they were cherry-picked and taken out of context, but the judge allowed several entries to be entered as exhibits and even quoted from them in her ruling that let the trial proceed.

The entries that have drawn the most attention were written in 2017, during a particularly turbulent period as OpenAI was wrestling with its future direction and Musk’s role in the company.

One August 2017 entry showed Brockman grappling with the tension between financial realities and the original mission to benefit humanity. A September entry captured his stream-of-consciousness reasoning about the complicated Musk situation - written in the same “chain of thought” style that would later become famous in AI models. The most cited entry, labeled Exhibit 161, was written in November 2017, both before and after a pivotal meeting with Musk. It revealed a founder full of uncertainty, ambition, self-doubt, and a clear desire to do the right thing for the company’s long-term mission.

Brockman testified that he used the journal to process important decisions and that he wrote only for himself. He described the public disclosure as “very painful” but said there was “nothing in there that I’m ashamed of.” He stopped documenting OpenAI matters in the journal in 2023. Musk’s attorneys have referred to the document as a “diary,” while OpenAI’s lawyers have called it a “journal.”

  Tyler Durden Tue, 05/12/2026 - 23:53