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By Benjamin Picton, Senior Markets Strategist At Rabobank

Massive Live Support

“On massive life support” was Donald Trump’s characterization of the US-Iran ceasefire yesterday. This followed Sunday’s rejection of Iranian terms for peace that Trump described as “totally unacceptable”. In a boy-who-cried-wolf-style sign of growing market insensitivity to Presidential prognostications, Brent was only up 2.88% to $104.21/bbl and WTI crude remains below $100/bbl. Dated Brent rose by 0.6% yesterday to $105.62. This even as the Wall Street Journal reports that the UAE has been “secretly” carrying out attacks on Iran, including on refining infrastructure. 

US equities closed broadly higher but European stocks were mixed. The FTSE100 eked out gains despite (because of?) fresh signs that Keir Starmer’s premiership is also on “massive life support” as more than 70 of his own MPs have now publicly voiced opinions that the Prime Minister should go following last week’s shellacking at the hands of the Reform party in local government elections. The French CAC40 fell by 0.69% and the German DAX was virtually unchanged. Asian stocks also had a mixed session earlier in the day with losses for Japanese and Australian indices, but gains for chip-heavy markets in China, South Korea and Taiwan.

Bond markets have been more unified in their gloom over the last 24 hours. Yields on US 10s were unchanged at 4.41%, but virtually everywhere else saw chunky rises in benchmark borrowing costs. Yields on 10-year OATs were up 3.9bps, 3.5bps for Bunds, while Gilts saw yields spike 8.6bps in a sign that bond traders might be thinking it’s a case of “better the devil you know” when it comes left-of-centre Prime Ministers in the UK.

With the prime ministerial instability gauge now well and truly pointed towards “embattled”, Starmer gave a speech yesterday that was intended to strike a tone of defiance and send the message that he wouldn’t be going anywhere. In that speech he suggested that he had not been sufficiently radical in forcing the pace of change, that the UK needed to forge closer military and economic ties with the EU, and that “if we don’t get this right, our country will go down a very dark path” - by which he presumably means it would elect Nigel Farage as his replacement.

This might sound like a curious response to the rising appeal of a Eurosceptic party channelling popular sentiment that the country has already changed too much, too fast, while the incumbent government’s revealed lack of electoral appeal suggests that many voters think the country is already headed down a very dark path under Starmer’s leadership. The implication here is that Starmer isn’t really fighting Reform, but the rise of the left-wing Green party who are siphoning off erstwhile Labour votes. Clearly, the center cannot hold and we should expect even more intense polarisation ahead, and probably more damage to the budget. Whither the Gilt market?

Speaking of budgets, Starmer isn’t the only Anglosphere Labour leader saying that things aren’t changing fast enough. Australian PM Albanese made the same comment in relation to his country’s poisonously expensive housing market this week as his Treasurer prepares to deliver the Commonwealth budget later today.

As is now the norm for budgets, most of the major initiatives have been strategically leaked well in advance and a wind-back of investor tax concessions has been telegraphed as a social cohesion measure to placate Gen Zs angry about their effect on house prices (for our detailed thoughts on this, see here). The budget is also expected to introduce new rules for discretionary trust distributions to be taxed at the company rate (to reduce their appeal as a tax-minimisation device) alongside measures to boost defence spending and cut the pace of growth in the welfare state – something that Starmer was unable to secure support for among his own MPs.

Treasurer Chalmers has said there will be a focus on resilience with “more than the usual amount of savings, and more than the usual amount of [tax] reform”. Overall, the vibe seems to be a tightening of fiscal settings – which ought to be welcomed by the RBA – coupled with tax nudges to direct a greater volume of capital toward the productive sectors of the economy rather than allowing it to congeal in the housing market. Whither Aussie bonds?

Of course, while all this is going on the Strait of Hormuz remains functionally closed and world fertilizer and energy markets are treading air like Wile-e-Coyote run off the cliff. Donald Trump will be traveling to Beijing tomorrow to meet with Xi Jinping. Finding a resolution to the war is sure to be at the top of the agenda, with Trump likely to press Xi to lean on his Iranian and Russian allies to seek peace in their respective theatres. Russia has made conciliatory noises in recent days, while Iran has indicated a willingness to hand over some highly enriched uranium to an unspecified third party (Russia?). Is there a grand bargain to be made?

In a case of curious timing, the US just imposed fresh sanctions on individuals and firms involved in facilitating Iranian oil sales to China, and Acting Secretary of the Navy Hung Cao yesterday released a new 30-year shipbuilding plan. That plan anticipates the acquisition of 11 nuclear-powered Trump class battleships, new underwater drones, and an ongoing review to the Ford class aircraft carrier design to increase lethality and reliability while reducing unit costs and production lead times. The planned expansion of the US fleet and shipbuilding industrial base is undoubtedly a reaction to China’s growing naval strength and substantial advantage in production capacity. The message to Xi is an unsubtle one.

The FT’s Gideon Rachman characterises Trump as arriving at Xi’s court in a state of supplication, having effectively lost the trade war vs China and the shooting war vs Iran. This perhaps overstates the weakness of Trump’s position by ignoring the fact that the US has tightened its grip on global energy supply chains and has shown that is has the power to put its foot on the hosepipe of Chinese energy imports whenever it likes. In the flurry of commentary over China’s bumper trade surplus in April, it seems to have been missed that import volumes for crude oil were down sharply, but values were higher. Yesterday’s April PPI figures for China also underscored the uncomfortable effects that the Iran war is having on the Chinese industrial economy.

Xi will be acutely aware of this, and he will also be aware that the US holds similar power to disrupt Chinese food imports if it was of a mind to do so. Seapower IS power, as the shipbuilding plan should remind us all. In this respect, Trump holds better cards than the FT is giving him credit for. Perhaps it is no coincidence that China bought more soybeans in April than it had done for months.

Anthropic warned investors that any unapproved sale or transfer of its private shares, including those packaged through tokenized products, is void and will not be recognized on the company’s books, escalating tensions over how restricted pre-IPO equity can be repackaged for retail traders. 

The AI company behind Claude quietly updated its investor-warning page Monday, stating that both preferred and common stock are subject to transfer restrictions contained in its bylaws. The notice, first published in February and revised this week, explicitly bans special purpose vehicles from acquiring its stock and casts doubt on structures claiming economic exposure to Anthropic shares.

“Any sale or transfer of Anthropic stock, or any interest in Anthropic stock, that has not been approved by our Board of Directors is void and will not be recognized on our books and records,” the company said. “This means that if someone purports to sell Anthropic shares without proper board approval, that transaction is invalid.”

Anthropic added that it does not permit special purpose vehicles to acquire its stock and that any such transfers are void. It also warned that third parties offering Anthropic shares to the public through direct sales, forward contracts, tokenized securities, or similar mechanisms are likely engaged in fraud or offering investments that may have no value.

"We do not permit special purpose vehicles (SPVs) to acquire Anthropic stock and any transfer of shares to an SPV are void under our transfer restrictions. Offers to invest in Anthropic’s past or future financing rounds through an SPV are prohibited." 

The company listed several firms as unauthorized, including Open Door Partners, Unicorns Exchange, Pachamama, Lionheart Ventures, Sydecar, Upmarket, and new offerings on Hiive and Forge Global.

Tokenized Markets in the Crosshairs

The update directly addresses the growing market for tokenized pre-IPO exposure. Over the past year, crypto platforms have created offerings tied to high-profile private companies such as Anthropic, SpaceX, and others. Some products are synthetic perpetuals that track implied valuations without holding underlying shares. Others, including certain tokenized offerings on PreStocks, aim to provide economic exposure through SPVs or secondary holdings.

Anthropic just published a statement that should terrify anyone buying private AI shares on secondary markets.

>>>>“Any sale or transfer of Anthropic stock… that has not been approved by our Board of Directors is void.”

Not restricted.
Not disputed.
Not under review.

Void.… pic.twitter.com/HjILRsdBku

— Swati Gupta (@hrswatigupta) May 12, 2026

PreStocks’ terms state that buyers receive no equity or shareholder rights in the underlying company, only economic exposure tied to reserve backing. However, the platform does not specify whether its Anthropic-linked tokens are structured through an SPV, leaving uncertainty around compliance with Anthropic’s restrictions.

PreStocks’ terms of service state that buyers receive no equity or shareholder rights in the underlying company, only economic exposure tied to reserve backing, However, it does not specify whether this exposure is delivered through a special purpose vehicle, leaving uncertainty around the exact structure behind its Anthropic-linked tokens, which the company says may be invalid.

That model may be more intuitive to investors, but it also runs more directly into the restrictions private companies place on who can buy, sell or hold interests in their stock. -Coindesk

Tokenized markets can generate eye-popping implied valuations even with limited underlying assets. PreStocks’ dashboard recently showed an implied valuation for Anthropic above $1.5 trillion and a market valuation around $1.37 trillion, despite the platform holding roughly $23 million in total assets, according to CoinDesk. Such prices create narrative and valuation risks that private companies cannot fully control. 

Florida-based crypto lawyer John Montague told the outlet last year "I think private companies may also initiate lawsuits alleging that this violates their governance documents, shareholders' agreements, investor rights agreements, or bylaws," adding "I view it as the issuer’s right to control the terms of transfer."

The Anthropic-linked token on PreStocks fell nearly 25% in a single day following the announcement, dropping to $1,023.90.

No public responses from the named platforms or firms had been issued as of Tuesday. The move follows a similar policy clarification by OpenAI and is expected to increase scrutiny of secondary and tokenized markets for private technology companies.

Anthropic, valued at $380 billion following its February funding round, directed equity-related inquiries to a dedicated email address and urged investors to verify offerings through regulatory channels and seek independent advice.

The frenzy around Anthropic equity has reached unusual levels. Last month, Bay Area investment banker Storm Duncan offered his $4.8 million Mill Valley estate in exchange for Anthropic shares rather than cash, highlighting how illiquid and highly sought-after the company’s pre-IPO stock has become.

The company has not issued further public comment beyond the updated notice.

UK Prime Minister, Sir Keir Starmer, is on the brink this morning as The Telegraph reports that six Cabinet Ministers reportedly call on him privately to quit and the number of MPs on the record saying he must go reaches 84.

The Telegraph learnt before the meeting that six ministers – Shabana Mahmood, John Healey, Ed Miliband, Lisa Nandy, Yvette Cooper and Wes Streeting – had been expected to demand Sir Keir’s resignation.

However the Prime Minister did not give Ministers a chance to speak against him and instead set out his case on why he should remain in office.

He told Ministers: “The Labour Party has a process for challenging a leader and that has not been triggered. The country expects us to get on with governing. That is what I am doing and what we must do as a Cabinet.”

He then spent the rest of the hour discussing policy issues and the impact of the Iran war.

Rebecca Long-Bailey, who served under Jeremy Corbyn and was sacked from Sir Keir’s shadow cabinet in August 2020, demanded that the Prime Minister “end this chaos” and set out a timetable for an orderly leadership transition.

Long-Bailey, the 84th MP to call for the Prime Minister’s departure, said:

“Many former Labour voters now feel our party is no longer on their side."

“What we witnessed with the last government was the chaos of constantly changing leaders,” Starmer said.

“And it cost this country a huge amount, a huge amount.”

Some Labour MPs are now talking down the prospect of higher spending despite many of the party’s critics of Downing Street calling for a more relaxed approach to borrowing at various points since Starmer was elected in 2024.

“I don’t think there’s anyone who’s seriously asking for large unfunded pledges,” said Yuan Yang, a Labour MP on parliament’s Treasury Committee.

“We understand the importance of fiscal rules, we understand the importance of getting down the cost of borrowing.”

Still, others on the left of Labour are touting various ways to boost public services.

But, despite that placting, the pound extended losses on Tuesday morning, down more than 0.5% to $1.3536 having traded above $1.3650 the previous day. Gilts came under further pressure, with the yield on 10-year notes jumping beyond 5.10% on Tuesday as bond investors expressed concern that any replacement for Starmer would increase fiscal spending, potentially driving borrowing costs higher. The yield on 30-year debt hit its highest level since 1998.

Finally, as Nick Corbishly writes in detail via NakedCapitalism, Starmer’s rapid rise and (apparent) fall are symptomatic of a broader trend unfolding across the Davos regimes of the collective West. 

Following the Labour Party’s drubbing in last week’s local elections, Prime Minister Keir Starmer needed to do something big and/or bold to salvage his crumbling “leadership” (for lack of a better word) — something that might have conveyed to his disenchanted voters that their welfare actually mattered. He did neither.

Instead, he brought Harriet Harman back into government as his “adviser on women and girls”. In the 1970s, Harman wrote a paper for the Paedophile Information Exchange (PIE) defending child pornography. As The Canary notes, “Starmer’s first act of his reshuffle, after months of scandals over his knowing appointment of paedophiles’ pals to senior positions”, was “to appoint a woman linked to a notorious paedophilia advocacy group.”

Starmer’s next move was to bring back former Prime Minister Gordon Brown as the government’s “special envoy on global finance and cooperation”, which, again, was an interesting choice. Besides failing quite abjectly as prime minister (2007-10), Brown is probably best known for two things:

• Selling nearly 400 tonnes of UK gold reserves between 1999 and 2002 at a 20-year market low, in what famously came to be known as the “Brown Bottom“. By announcing the sale in advance, Brown, then chancellor of the exchequer, helped trigger a 10% fall in the market price of gold before a single ounce has been offloaded.
• Helping to unleash the “animal spirits” of financial liberalisation during his tenure as chancellor (1997-2007), only for his tenure as prime minister to be marked by the 2008 crash — a crisis often described as a collapse of those same spirits. That painful history wasn’t enough to prevent Starmer from pledging last year to “bring back the animal spirits of the private sector” by reducing the regulatory burden on businesses.

Starmer’s third move was to try to deliver a skin-saving speech that would, if not inspire the nation, at least put paid to any internal stirrings within his government. But impassioned, inspirational speeches are not exactly Starmer’s forte. As the veteran political analyst Andrew O’Neil noted in the wake of yesterday’s speech, “there’s rarely been a situation so bad that it can’t be made worse with a Keir Starmer speech”:

It certainly wasn’t the Gettysburg Address. But nobody expects that from Keir Starmer. In places it was a familiar walk down memory lane, with the PM bigging up, yet again, his alleged working class credentials. As if we care.

There was plenty of emoting with working people. Though much good it has done them so far. There was a lot of talk of the need for radical change. But no concrete examples of what that would entail. The three policies he announced were simply a rehash of existing policies.

And there were a few outlandish claims, including the assertion that he’d stabilised the economy — and that our economic ‘fundamentals are sound.’  Yes he actually said that.

Normally, when a sitting PM is thumped as badly by the voters as Starmer was on Thursday, they feel the need to say something to the nation.  But Starmer wasn’t speaking to us today. He was speaking to the Labour Party, especially its MPs who hold his fate in their hands.

Hence the Labour crowd-pleasing sections on renationalising British Steel — it’s already under state control —  taking Britain back to the ‘heart of Europe — whatever that means — and more apprenticeships for young folks — already party policy. So far Starmer’s efforts to save his own skin have been a textbook case of how NOT to save your own skin.

I think I'm now at the stage of pitying him.

The silence at the end - where it was obviously assumed there would be hearty applause - is so gloriously cringe-worthy. pic.twitter.com/JVEIwrHeED

— Olly (@oIIyjm) May 11, 2026

At this point, the only thing that could possibly save Starmer’s skin is the absence of a clear successor within the party’s senior ranks. Labour’s neo-Blairite health secretary, Wes Streeting, appears to have already mounted a leadership challenge. But Streeting is even more exposed than Starmer to the Labour Party’s “prince of darkness”, Peter Mandelson, who is now under criminal investigation over his associations with Jeffrey Epstein.

I called for time for serious discussion, no precipitous coup & fully democratic process if leadership election.Instead Wes Streeting has launched coup for fear of a democratic process & whilst candidates are blocked. Handing leadership to Mandelson’s protege is gift to Reform

— John McDonnell (@johnmcdonnellMP) May 12, 2026

Streeting is also about as soulless and characterless as Starmer and is even more craven to corporate interests (see below). Labour’s soft-left members, like John McDonnell, will stop at nothing to prevent a Streeting premiership. If they fail in that task, Streeting’s ascendance would represent the ultimate coup for the Blairite wing of the Labour Party that sabotaged Jeremy Corbyn’s leadership with the bogus charge that Corbyn was anti-Semitic.

As of writing (Monday evening, GMT), the odds of a Streeting challenge appear to be rising.  According to Bloomberg’s Alex Wickham, the prime minister looks in increasing peril as several of Streeting’s allies, including his PPS Joe Morris and constituency neighbour Jas Athwal, have called for Starmer to stand down:

— Labour MPs and aides say developments could now happen quickly if momentum continues to build. A loyalist says it’s now a matter of when not if.

— A Labour official says they believe several Cabinet members are ready to tell the PM he has to set a timetable for his departure if it becomes clear he has lost the authority of the backbenches. They think if the number of public dissenters heads toward three figures that will happen.

— However Cabinet aides insist we are not there yet and they don’t think the whole Cabinet is yet ready to move. One notes that Streeting’s allies appear to have gone after markets closed, after gilts dropped on Monday on the political instability. There will be a lot of attention on market open tomorrow.

— Streeting is silent but there appears to be an orchestrated plot by his supporters to call for Starmer to go so he can move. There was disappointment among some of Streeting’s allies today that he has not moved already but it now feels increasingly inevitable.

Another possible successor is — or at least, was — Manchester City Mayor Andy Burnham, but he would need to become a member of parliament to be able to run as Labour leader. And the Labour Party leadership recently blocked him from being able to stand as a candidate for the by-election in Gorton and Denton. According to Wickham, “Burnham’s allies say he will soon be ready to show he has a route to parliament.”

There’s also the fact that Burnham, who was once a minister under Tony Blair, has already run for the party’s leadership twice before, with underwhelming results. Like Streeting and most other high-ranking party members, he also has close ties to Labour Friends of Israel and other Zionist lobbies.

Your Reminder that Streeting, Burnham. Rayner and Milliband have all been prominent in Labour Friends of Israel and all received donations from the zionist lobby.

— Craig Murray (@CraigMurrayOrg) May 11, 2026

Meanwhile, the party is haemorrhaging support, both to Nigel Farage’s Reform Party on the right and the Green Party on the soft left. This is not a surprise given the scale of Labour’s betrayal to its core voters, beginning with the proposed scrapping of the winter fuel allowance in its first months of power, as well as the authoritarian excesses of Starmer’s rule, writes Yannis Varoufakis:

The crux of their debacle lay, first, in a distinctly dictatorial, authoritarian reflex. And second—crucially—in a seething contempt for those who lent them their votes, while simultaneously performing a grotesque pantomime of flattery toward those who never would, and never will, support them.

Having exorcised from the Labour Party its most authentic voices—people of unimpeachable integrity, such as Ken Loach and Jeremy Corbyn, a purge that eluded even Tony Blair’s repertoire—Starmer embarked on a rampage:

He slashed disability benefits; armed and fed intelligence to the Israeli government as it executed genocide in Gaza; channeled his own inner Farage, perhaps his inner Enoch Powell, to vilify migrants and treat refugees as vermin; gutted international aid to masquerade as a defender of defence spending; bulldozed wildlife and their habitats; unveiled a new lexicon of draconian anti-protest laws; left trans people suspended in legal limbo; clung with religious fervour to absurd, socially ruinous fiscal rules; allowed Rachel Reeves to squander £100 billion covering the Bank of England’s outrageous and wholly unnecessary Quantitative Tightening losses—a gift that keeps giving to the City’s banks—while imposing yet another round of austerity on government departments and public services.

Once the great hope of the downtrodden, Starmer’s Labour has become the villain – the genuinely nasty party. Once a human rights lawyer, he has single-handedly plunged Britain into a shoddy, incompetent authoritarianism.

We have covered that creeping authoritarianism in some depth in our two-instalment post, “Just How Dystopian Can Starmer’s Britain Become?” (here and here). Indeed, arguably Starmer’s most important legacy is the way he has instrumentalised the law, particularly the anti-terrorism laws, to arrest and intimidate pro-Palestinian journalists, activists and protesters.

With ruthless zeal, his government has criminalised public opposition to Israel’s genocide in Gaza while lending support to the furtherance of said genocide, including through the provision of more than 100 RAF spy flights over Gaza. In Starmer’s Britain, merely expressing critical views about the political ideology of Zionism in a private conversation can get you arrested…

If you, in a private conversation on a train in the UK, express criticism of Zionism, British police will hunt you down to arrest you.#priorities https://t.co/e7wq1kqzNN

— Trita Parsi (@tparsi) May 10, 2026

Even before his election as prime minister, in July 2024, Starmer had shown his true colours on the Israel/Palestine question. Starmer had already played an important role in bringing down his former, pro-Palestine boss, Jeremy Corbyn. On October 11, 2023, Starmer, then leader of the opposition, told LBC that Israel had the right to collectively punish Gaza, including by cutting off water and power to the enclave, in response to Hamas’ Oct 7 attacks.

11th Oct’23

Starmer on the siege of Gaza ????

“Israel ???? does have that right" to cut off water & power from Gaza ????

He gave support to ???? to bomb and starve children

He partnered with Netanyahu ????

Never let anyone forget

Starmer is not a ‘decent man’pic.twitter.com/MHyEsuE5dw

— Howard Beckett (@BeckettUnite) February 10, 2026

Following Corbyn’s demise, Starmer began the task of purging the Labour Party of any remaining left-wing thinkers. It is a task he may well have been assigned by the Trilateral Commission, a trans-Atlantic forum set up by US billionaire David Rockefeller in the 1970s to help steer Western democracies by prioritising corporate interests over those of labour. According to Matt Kennard, Starmer was the first ever sitting British member of parliament to join the Commission, which he did behind Corbyn’s back.

Starmer’s job was to extinguish socialist left organising in Labour, to block any future prospect of a left fightback, to ensure there could be no socialist left leader in the near future & to create distance from the trade union movement- irrespective of the electoral…

— Laura Pidcock (@LauraPidcock) May 11, 2026

Since Starmer’s election in July 2024, the Blairite faction of the Labour Party has wielded enormous influence over government, both through the appointment of Blair acolytes like Streeting and Peter Kyle, the science secretary, and through Blair’s think tank, the Tony Blair Institute for Global Change (TBI), as we warned in our our May 3, 2024 post, Tony Blair and His Associates Are Waiting in the Wings to Take Back Power in UK:

One of the great contradictions of British political life over the past 15 years is Sir Tony Blair. The three-term prime minister is broadly reviled by the British public, even among many Labour Party voters, yet he continues to be feted and fawned over by the British establishment and media. Even after the “crushing verdict” (in The Guardian‘s words) of the Chilcott Inquiry — that the Blair government’s case for the Iraq war was “deficient” — was finally made public in 2016, Blair remained a go-to person for the British and international media on all manner of topics, particularly the COVID-19 pandemic.

It is a very different story for the British public. In a recent YouGov opinion poll, only 22% of respondents said Blair had had a positive effect on the Labour Party, with 38% saying his impact was broadly negative. Even among Labour Party voters, only 26% labelled his impact as positive compared to 38% who saw it as negative. According to another YouGov survey, this time from 2022, a mere 14% approved of his knighthood and only 3% strongly so, while 63% disapproved, 41% strongly so. Over a million people signed a petition demanding the knighthood be revoked.

In other words, the last thing most people in the UK want to see is Blair making a political comeback. Yet the former PM is closer than ever to regaining political power, albeit through a proxy Labour Party government led by the current party leader, Keir Starmer, who is hotly tipped to win the next general election… Starmer is favourite to win not because of a groundswell of support for his vision or candidacy — the UK public view the party under Starmer even less favourably than under Ed Miliband — but because support for the governing (if you can call it that) Conservative Party is in freefall…

As the FT reported in 2023, TBI has in effect become a global consultancy to the UK government, giving advice on a whole host of issues. It has over $100 million and is currently active in 40 other countries, including the United States. Most, however, are in the global south/majority, where TBI advises governments on DPI such as digital vaccine certificates, digital identity and central bank digital currency.

Since coming to power, Starmer’s government has prioritised the digital authoritarian solutions peddled by TBI, such as digital identity; the mass sharing of the UK’s digital health data, which would hugely benefit TBI’s main paymaster, Larry Ellison; and the nationwide deployment of facial recognition cameras, a project that was begun by the Conservatives but has been massively expanded by Starmer.

Blair’s latest grand proposal for the people of Britain is to scrap the state pension’s triple lock, which will help further impoverish struggling pensioners…

Once again, Tony Blair is wrong and advocates to make ordinary people worse off.
Britain has one of the lowest effective state pension entitlements in the whole of Europe.

Tony Blair's thinktank urges scrapping of state pension triple-lockhttps://t.co/ipQ9PuGNUl

— Diane Abbott (@HackneyAbbott) May 1, 2026

A Streeting government would further intensify these trends. As an FT exposé revealed just yesterday, the Streeting-run NHS England has granted external staff from companies including Palantir “unlimited access” to identifiable patient data. This is in direct contradiction to NHS England’s previous claims about Palantir’s management of the NHS’ federated data platform, in which all keys and data, they said, would stay under NHS control.

FT Exclusive: NHS England has granted external staff from companies including Palantir “unlimited access” to identifiable patient data while working on a part of its flagship data platform. https://t.co/sxgWCuZua6 pic.twitter.com/qR7JogFhxw

— Financial Times (@FT) May 11, 2026

It’s still unclear whether Starmer will see out this crisis, though the current signs are far from encouraging. If he doesn’t, the UK will soon have its seventh government since the Brexit referendum 10 years ago. As The Times’ Matthew Syed notes, the next leader, whoever he or she is, “will be subject to instant leadership speculation and the next, and the next, whether Labour, Reform or Tory. Britain is becoming ungovernable.”

As political instability in the country rises, one can’t help but wonder to what extent it will affect the country’s economic stability. With unemployment already close to COVID-era highs and 10-year gilts topping 5% in recent days and 30-year gilts just hitting a 28-year high, the warning signs are already flashing.

Some may feel I’m dwelling on this, but I am concerned for the health of the UK economy.
The yield on the 10-year gilt has climbed 12 basis points today (see the CNBC chart below), decoupling from both oil prices and yields in other advanced economies—both of which are currently… pic.twitter.com/38rAwIc0uX

— Mohamed A. El-Erian (@elerianm) May 5, 2026

Ultimately, what is happening in the UK — the rapid rise and fall of mediocre leaders, the degradation of living standards, the unquestioning support for Israel, even as it commits two genocides, the inability to find a new place in the emerging multipolar world, and the rapid roll out of digital surveillance and control systems — is symptomatic of a broader trend affecting the “Davos Regime” across the collective West, as Armchair Warrior noted in a tweet yesterday:

We’ve actually seen this for years now in the West, electoral cycle after electoral cycle. Party A takes a certain paraliberal policy course – let’s call it the Universal Davos Policy – that heavily favors special interests and globalism, and which is wildly unpopular with citizens because it necessarily entails continued degradation of Western standards of living (via self-destructive economics from war and/or green policy) and cultural cohesion (via mass migration and official woke nihilism). Party B then campaigns against this state of affairs, scores a massive win in a protest vote, and continues the Universal Davos Policy unchanged, sneering all the while at anyone who suggests they should actually fulfill the campaign promises that got them into power. Party A then takes advantage of voters’ short memories to get back into power on another landslide protest vote, or in more fractured political systems Party C wins the protest vote… and they continue the Universal Davos Policy unchanged.

Thus we have constant political churn in the West, with political blocs switching off essentially every election – and no policy turbulence at all because the entire political establishment is a wholly owned subsidiary of Davos and ignores voters to do their bidding on ALL substantive policy issues. Anti-Davos political forces are ruthlessly branded as extremists, coopted to promote the Universal Davos Policy should they assume power, or even criminalized and destroyed. Democracy itself is no object, as elections have begun being cancelled and openly rigged in the West when the wrong person could possibly win.

US equity futures and bonds were lower as oil climbed, with a key inflation report showing the impacts of higher energy and supply disruptions stemming from the war in Iran. Stocks are poised to fall from all-time highs after the core CPI rose more than expected in April. As of 9:15am S&P futures ewere down 0.2% and Nasdaq futures dropped 0.7% as a slide in chipmakers and big tech names dragged down the market in early US hours. In premarket trading, all Mag 7 stocks were lower. Treasury two-year yields hovered near the highest since March. Tech’s underperformance followers a weaker APAC session with KOSPI’s biggest loss since early April after the govt hintedf at a potential tax on AI profits dubbed a ‘Citizen Dividend’; the index finished off its lows pointing to the dip buying potential of Semis as the market takes advantage of any price discount. US crude rose to around $101. Gold weaker and sitting just below $4,700/oz. Economic data slate includes weekly ADP employment change (8:15am), April CPI (8:30am) and federal budget balance (2pm). Fed speaker slate includes Chicago Fed’s Goolsbee (9:10am, 1pm), and NY Fed releases quarterly report on household debt and credit at 11am

 

In premarket trading, Mag 7 names are all lower (Tesla -1.5%, Alphabet -0.9%, Amazon -0.8%, Nvidia -0.8%, Microsoft -0.6%, Meta -0.5%, Apple -0.4%)

• AST SpaceMobile (ASTS) falls 11% after the satellite internet company reported revenue for the first quarter that missed the average analyst estimate. The firm also had a wider loss than forecast.
• GameStop (GME) slips 3% after eBay Inc. rejected a $56 billion takeover offer from the company.
• GitLab (GTLB) is down 11% after the software company announced plans to cut jobs and make operational changes. Raymond James says efforts to retool the business while cutting staff may be challenging, while RBC says guidance for in-line 1Q results suggests no upside versus prior beats.
• Harmonic (HLIT) rises 15% after the communications equipment company reported first-quarter results that beat expectations and gave an outlook that is seen as strong, underlining positive momentum.
• Harrow (HROW) slumps 10% after the eyecare pharmaceutical firm posted an adjusted Ebitda loss for the quarter, disappointing analysts who’d forecasted a profit. The company also reported revenue for the first quarter that fell short of the average analyst estimate.
• Hims & Hers Health (HIMS) slides 15% after the telehealth firm projected 2Q Ebitda that missed consensus estimate, a result of higher costs as it transitions to branded products.
• IHeartMedia (IHRT) slips 4% after the media entertainment and radio broadcasting firm provided a disappointing forecast adjusted Ebitda for the second quarter.
• Microvast Holdings Inc. (MVST) sinks 40% after the battery firm reported first-quarter revenue that fell short of the average analyst estimate.
• PACS Group (PACS) soars 22% after the nursing home operator boosted its adjusted Ebitda guidance for the full year, following better-than-expected results for the first quarter. Truist views the quarter results as a strong start to the year.
• Plug Power (PLUG) is up 7% after the hydrogen producer’s first-quarter net revenue beat the average analyst estimate, with analysts attributing the growth to large customers such as Amazon and Walmart.
• Power Solutions International (PSIX) drops 31% after the engine and power systems manufacturer reported first-quarter revenue and income that fell short of analyst estimates and declined to give full-year guidance, citing variability in order timing and market conditions.
• Quantum Computing Inc. (QUBT) jumps 24% after the application software developer reported revenue for the first quarter that beat the average analyst estimate.
• Venture Global (VG) rises 8% after the liquefied natural gas company reported first-quarter earnings per share that beat the average analyst estimate and announced new deals with TotalEnergies and Vitol.
• Webtoon (WBTN) slumps 10% after the storytelling technology platform gave a revenue forecast for the second quarter that missed the average analyst estimate.
• Wendy’s (WEN) shares jump 23% as the Financial Times reports that Nelson Peltz’s Trian Fund Management is seeking investor backing for a bid to take the burger chain operator private.
• ZoomInfo Technologies (GTM) slides 36% after the software company reduced its full-year forecast for adjusted operating income. The company also announced a restructuring program that will cut about 600 jobs.

In other corporate news, JPMorgan has seen balances within its prime-brokerage business soar to a record as clients look to seize on recent market volatility. Amazon.com has begun the sale of its first Swiss franc bonds as it looks to raise a record six-part deal in the currency.

Wall Street traders left stocks and bonds lower as oil climbed, with today's CPI report showing the impacts of higher energy and supply disruptions stemming from the war in Iran, resulting in hoter than expected core CPI prices: CPI rose 3.8% from a year earlier, marking the fastest pace since 2023. From a month earlier, prices were up 0.6%, while core prices rose 2.8%, higher than the 2.7% expected.

“Inflation is roaring back largely driven by stubbornly high oil prices,” said Skyler Weinand at Regan Capital. “As a result, we expect the Federal Reserve to be on hold through the summer on interest rates.”

Given that inflation is heading in the wrong direction and the labor market is holding up, it’s very unlikely that the Fed will be able to lower interest rates any time soon, according to Chris Zaccarelli at Northlight Asset Management.

“We don’t believe the market needs rate cuts to keep climbing, but earnings will need to keep doing a lot of the heavy lifting as multiple expansion isn’t in the cards right now,” he said. “The Fed has been clear that it is willing to look through any temporary inflation spike tied to the Iran conflict, and that remains the key consideration for investors in the near term,” according to Tim Urbanowicz at Innovator ETFs from Goldman Sachs Asset Management.

“Markets had already priced out rate cuts for 2026 heading into the report,” he said. “As long as the 10-year Treasury yield remains contained below 4.5%, we do not see these levels as a meaningful headwind for equities.”

The energy crisis’s impact on the global economy is showing up in gauges of supply-chain stress that soared during Covid. The US Strategic Petroleum Reserve released another wave of emergency oil to help tame surging prices stemming from the Iran war. A federal gasoline tax holiday proposed by Trump would result in billions of dollars in lost tax revenue each month.

Inflation isn't just in the broader market: AI also has an an inflation problem as highlighted by a Bloomberg article discussing how “chipflation” is crowding out supplies of more conventional semiconductors. Meanwhile, a top South Korean policymaker said the nation should pay citizens a “dividend” using taxes on AI profits, underscoring growing pressure to redistribute gains from a boom that’s enriched chipmakers like Samsung Electronics and SK Hynix. 

Tech stocks are taking a breather under the weight of growing warnings that their unprecedented rally has run too far, while a suggestion to target AI profits in South Korea hasn’t helped sentiment either.

In politics, the Trump administration asked the US trade court to pause a ruling that declared the president’s latest 10% global tariffs unlawful while the government appeals. Japan’s Finance Minister confirmed that her team is coordinating closely with US Treasury Secretary Scott Bessent on currency policy, signaling tacit US approval of Japan’s recent suspected market intervention.

Investors are still holding onto short S&P 500 futures positions despite accumulating losses, with the average short entry ~6680 on the index, which raises short-covering risks and in turn could fuel a further melt-up in equities, according to Citigroup strategists. 
Options markets are pricing in limited expectations ahead of the Trump-Xi meeting, leaving room for an outsized reaction, according to JPMorgan equity-derivatives strategists. 

Global corporate earnings surged in the first quarter, according to Deutsche Bank strategists, marking the strongest growth in more than four years as demand tied to AI fueled a broad-based expansion.

European bourses are entirely in the red, with UK Banks hit on political turmoil; US equity futures pull back from ATHs. Energy is among the few rising sectors while retail, banks and technology are the worst performers. Stoxx 600 falls 0.8% to 607.95 with 440 members down, 149 up and 11 unchanged. Here are some of the biggest movers on Tuesday:

• SES shares rallied as much as 9.7% to the highest since July 2022 after the satellite operator’s adjusted Ebitda for the first quarter came in well above expectations.
• Greggs shares rise as much as 7.2%, the most in six months, after the UK high street baker revealed like-for-like growth has accelerated in recent weeks, partly thanks to new additions to the menu including its chicken roll, according to analysts.
• SoftwareOne shares jump as much as 15% after the Swiss IT services firm posted a first-quarter earnings beat and raised its full-year revenue guidance.
• Jenoptik surges as much as 16%, to a record high, after the optoelectronics group delivers what MP Capital Markets describes as a “blow-out” quarter.
• Tecan shares rise as much as 6.2% after the maker of laboratory automation components reported growth in local currency sales during the first quarter and maintained its full year guidance.
• Siemens Energy shares fall as much as 4.3% after the German renewable energy firm reported second-quarter results. While expanded share buybacks were seen as a positive, Bernstein highlighted weakening margins at the company’s gas unit.
• Prosus shares slide as much as 7.6% after the tech investor released a trading update that Jefferies said shows the turnaround of Just Eat Takeaway.com is a longer-duration project than some will have expected.
• Vodafone shares fall as much as 5.8%, the most since February, after the British telecommunications group reported its latest earnings, with analysts flagging a miss on Ebitda after leases.
• KBC shares drop as much as 4.4% after the banking and insurance services provider reported profits that fell short of expectations after it raised provisions to their highest level since 2020.
• Munich Re shares declined as much as 5.1% as the reinsurer reported weak P&C Re revenues, similar to peers.
• Thyssenkrupp shares fall as much as 4.2%, before recouping most of those losses, after the German industrial technology firm flagged a potential hit to sales but maintained its key profit and cash flow targets.

Earlier in the session, Asian stocks fell, as South Korean equities lead a decline after a policymaker said the nation should pay citizens a “dividend” using tax on profits from artificial intelligence. The MSCI Asia Pacific Index fell 0.4%, with Samsung and MediaTek among biggest drags. Korea’s benchmark slumped as much as 5.1% before paring loss to about 2% after a clarification. Stocks traded higher in Hong Kong and Taiwan. The fast growth in earnings for AI companies are starting to prompt calls for redistribution of some of those benefits. Korea’s knee-jerk reaction shows the extent in which some of Asia’s key technology-led markets are reliant on profits from AI buildout. Stocks also declined in India, mainland China and New Zealand.

In FX, the pound is one of the weakest major currencies against a broadly stronger dollar, with greenback and oil rising on doubts about US-Iran ceasefire.

In rates, treasuries hold losses in early US session amid bigger selloff in gilts and latest increase in oil prices after US President Donald Trump cast doubt on the Iran ceasefire. US yields are 1.5bp-2bp higher on the day — lifting 30-year back above 5% for first time since May 5 — with curve spreads little changed; UK 10-year rose as much as 14bp and remains 9bp higher vs Monday’s close  Gilts slump as UK MPs pressure Prime Minister Keir Starmer to set out a timetable to stand down. UK 10-year yields advanced to the highest since 2008 and 30-year yields to the highest since 1998.Treasury refunding auctions continue with $42 billion 10-year new issue at 1pm New York time; demand was soft for 3-year notes Monday. Cycle concludes Wednesday with $25 billion 30-year new issue. WI 10-year yield near 4.44% is ~12bp cheaper than last month’s auction, which tailed by 0.2bp. IG dollar issuance slate includes a couple of items so far. Twelve borrowers raised a combined $18 billion Monday, with issuers paying about 3bps in new issue concessions on deals that were 4.5 times covered. Focal points of US session include April CPI data and 10-year note auction.

Yields rising across Europe as Brent hits $107/barrel, and as investors add to bets on ECB and BOE rate hikes in 2026. The pound is one of the weakest major currencies against a broadly stronger dollar, with greenback and oil rising on doubts about US-Iran ceasefire. Stoxx 600 down 0.6%, dragged down by banks and retail stocks. S&P 500 futures down by 0.3% with weakness in chipmakers and big tech names in premarket trading. Gold weaker and sitting around $4,700/oz.

In commodities, WTI crude oil futures are up more than 3% near $101 a barrel, while global benchmark Brent crude traded near $107. The precious metals complex opened higher in Asia but there's been broad USD support through the London morning with a sharp correction back to lower in gold, moving from $4,774 down to $4,686. In Asia, the desk saw some light physical demand but gold was consistently offered. The white metals have followed lower with silver down around 3% after it led the sharp rally on Monday. Gold ETF holdings rose by 0.06moz, silver ETF holdings rose by 1.40moz. Oil is climbing as Brent is trading near $107.50 after hitting a daily high above £$108. Rising energy prices are in the spotlight ahead of today's US CPI data

Economic data slate includes weekly ADP employment change (8:15am), April CPI (8:30am) and federal budget balance (2pm). Fed speaker slate includes Chicago Fed’s Goolsbee (9:10am, 1pm), and NY Fed releases quarterly report on household debt and credit at 11am

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.7%
• Russell 2000 mini -0.3%
• Stoxx Europe 600 -0.8%
• DAX -0.8%, CAC 40 -0.6%
• 10-year Treasury yield +2 basis points at 4.43%
• VIX +0.5 points at 18.87
• Bloomberg Dollar Index +0.3% at 1193.03
• euro -0.3% at $1.1747
• WTI crude +3.3% at $101.33/barrel

Top Overnight News

• Trump has grown increasingly frustrated with how the Iranians are handling negotiations to end the war, and some Trump aides say that he is now more seriously considering a resumption of major combat operations than he has in recent weeks. CNN
• US President Trump to confront Chinese President Xi at the upcoming summit over China's backing of Iran and Russia. Officials said the leaders are also expected to discuss Taiwan, cybersecurity, artificial intelligence and rare earth supply chains during the summit. Fox News reported
• The White House said Trump will meet Xi Jinping in Beijing on Thursday. Boeing CEO Kelly Ortberg is expected to join the US delegation and has hinted at a major deal. BBG
• Some BoJ policymakers argued in April for raising rates soon, with one flagging the chance of a June move, highlighting a ?growing hawkish shift on the board as an oil shock from the Iran war sharpened pressure for near-term tightening. RTRS
• The Kospi swung after a top South Korean policymaker said the country should pay citizens a dividend using taxes on AI profits. The adviser later clarified it would be funded by excess profits. BBG
• Keir Starmer pushed back against calls for him to quit and vowed to his cabinet to stay on as PM. More than 80 Labor lawmakers have called on Starmer to step aside in the wake of last week’s local elections. UK bonds slumped and 30-year yields rose to the highest level since 1998. BBG
• Plastics prices are surging as a result of the Middle East war, creating significant margin pressure for a slew of companies. Many of these companies may push through price increases that will eventually be felt by consumers. Barron’s
• The US is delaying a plan to suspend beef import tariffs, according to the WSJ. Trump had been set to sign executive orders yesterday aimed at lowering prices. BBG
• Technology has never been more dominant in the stock market, and Nvidia now has a larger market value than the entire healthcare sector of the S&P500. Barron’s
• Musk’s AI model, Grok, lags far behind its fast-growing competitors—and an agreement by parent company SpaceX to rent massive computing power to Anthropic raises questions about whether it can still catch up. WSJ

Iran War

• IRGC Navy official Akbarzadeh said Iran has significantly expanded its definition of the Strait of Hormuz strategic zone to include the coasts of Jask and Siri beyond the main islands, Al Mayadeen reported.
• Iran Parliament Speaker Ghalibaf said "There is no alternative but to accept the rights of the Iranian people as laid out in the 14-point proposal. Any other approach will be completely inconclusive; nothing but one failure after another."
• Iranian Parliamentary spokesperson said "One of Iran's options in the event of another attack could be 90 percent enrichment. We will review it in the parliament.".
• Deputy Foreign Minister for Legal and International Affairs of Iran Gharibabadi said US draft plan about Strait of Hormuz shows an attempt to change the face of the issue. Considered this action to be an attempt to change the face of the issue, and said that while Iran is the target of threats, pressure and attacks, some are trying to turn the consequences of a military aggression and illegal blockade into a case against Iran.
• IRGC Navy deputy said in a recent case, Iranian forces fired warning shots after an American frigate showed “provocative behaviour” in the Strait of Hormuz, prompting it to change course, Fars reported.
• Iran’s ambassador to China said Tehran views its strategic partnership with China as key to countering US pressure and advancing demands for a lasting ceasefire, IRNA reported.
• CNN White House Correspondent Treene posted "Many in Trump’s orbit want Pakistani mediators to be far more direct in their communications with the Iranians", adds "some Trump aides say that he is now more seriously considering a resumption of major combat".
• Washington was on the verge of making a decision a week ago to resume attacks on Iran, Al Hadath reported. Those close to Trump convinced him last week at the last minute to freeze the decision to return to war. Israel assesses that Khamenei is still preventing any progress in the negotiations as the Supreme Leader.
• Pakistan's ambassador to Russia is convinced that the US will not resort to a new military operation against Iran, according to TASS citing an interview.
• Israeli Navy shells Khan Yunis coast, according to Noor News, while Israel also conducts airstrikes on multiple towns in southern Lebanon, according to Al Jazeera.
• UAE has carried out military strikes on Iran, according to WSJ citing sources; UAE strikes have included attack on a refinery on Iran's Lavan Island back in early April. The strikes, which the UAE hasn’t publicly acknowledged, have included an attack on a refinery on Iran’s Lavan Island which took place in early April around the time Trump was announcing a cease-fire.
• Israeli strikes in southern Lebanon killed six and fighting continues despite April 17th ceasefire, according to AFP.
• Hezbollah said it targeted a Merkava tank in the town of Bayada with a guided missile and it was seen burning.
• Secretary General of Lebanon's Hezbollah said "We are ready to cooperate with the authorities to achieve the sovereignty of Lebanon by stopping Israeli aggression by land, sea and air", ISNA reported.
• Qatar orders ships at its LNG port to “go dark” under new safety measures.

UK Politics

• UK PM Starmer said he will not be setting out a timetable for departure. He reiterated that he takes full responsibility for the election results.
• Plenty of Cabinet Ministers spoke following the meeting with McFadden saying no one directly challenged PM Starmer during the cabinet meeting, Kendall stating Starmer has her "full support" and Kyle saying Starmer provides "steadfast leadership."
• "[UK PM] Starmer did not give his critics any chance to speak against him in this morning's meeting", Telegraph's Diver reported.
• UK PM Starmer is, according to a 'very senior minister', going to fight, ITV's Peston reported. Further reporting by Mail on Sunday's Hodges stated that UK PM Starmer "is reportedly is looking for a dignified way of ending all this. But he doesn't want to be seen to be forced out."
• Over 81 Labour MPs have now called for UK PM Starmer to resign, Politics UK reported; "This is officially enough to launch a leadership challenge if they unite behind a single candidate".
• UK Junior Minister Fahnbulleh resigns (the first Ministeral level resignation) and called on PM Starmer to set a timetable for a transition.
• UK Chief Secretary to the PM, Jones, indicates that PM Starmer could be about to announce a timetable for his resignation, according to Times' Swinford. Jones said "I'm not going to get ahead of the PM's decision."
• Four UK cabinet ministers, led by the Home Secretary, have gone into Number 10 to tell the prime minister to set out a timetable for him to resign, according to ITV News. UK Deputy PM Lammy urges PM Starmer to set out a timetable to quit.
• Four people with knowledge of conversations involving the UK Cabinet believe some ministers will move today, Politico Playbook reported. As many as six ministers could ask for the PM to outline his exit plans at the Cabinet meeting.
• "Senior Labour figures are very nervous about the market reaction this morning, hence some in the Cabinet pushing the PM to go in a way that doesn't destabilise the party", Eurasia journalist Rahman posted.
• UK Foreign Minister Cooper told UK PM Starmer he should see an orderly transition of power.
• UK Greater Manchester Mayor "Burnham's allies say a seat has been lined up for him to stand - with an announcement aimed possibly today", The Times' Kendix reported.
• Allies of UK Greater Manchester Mayor Burnham state that a timetable of a new Labour leader/PM by end-September would provide Burnham with enough time to return to the House of Commons, Sky's Rigby reported.
• UK Chancellor Reeves has pulled out of her speech at the Global Risks Summit, according to Daily Express' Spyro.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the mild gains on Wall St, where the S&P 500 and NDX extended record highs, but with the upside capped by higher oil prices and geopolitical uncertainty after US President Trump said the ceasefire is unbelievably weak and is on life support, but added that a diplomatic solution with Iran is still possible. Furthermore, Trump was said to be now more seriously considering a resumption of major combat operations than he has in recent weeks, although sources also stated that a major decision on how to proceed is unlikely to be made prior to the president’s departure to China. ASX 200 was dragged lower as weakness in the tech, healthcare, financials and consumer sectors offset the commodity-related gains, while sentiment was also not helped by a soft NAB Business Survey. Nikkei 225 ultimately gained, but with price action choppy amid a softer currency, disappointing Household Spending data and hawkish undertones from the BoJ Summary of Opinions, while participants also reflected on the record earnings from SoftBank.
Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark led higher by Kuaishou Technology after it was reported that the Co. plans to spin off its Kling AI video unit at a USD 20bln valuation, while the mainland lacks conviction as participants await the looming Trump-Xi summit in Beijing.

Top Asian News

• AUSTRALIAN BUDGET: Australia sees 2025/26 budget deficit at AUD 28.3bln (vs AUD 36.8bln projected); sees 2026/27 budget deficit at AUD 31.5bln, 2027/28 deficit AUD 31.0bln; Treasurer says budget helps, rather than harms, the fight against inflation.
• US Treasury Secretary Bessent said he made no request to PM Takaichi regarding monetary policy; in very close contact with Japan's finance ministry and the relationship with it is working well; both believe FX volatility is undesirable. Japan's economic fundamentals are strong and resilient, and that will be reflected in exchange rates. Expects inflation to be a short-term and transient blip. Has great confidence BoJ Governor Ueda will guide the Bank to a very successful monetary policy. PM Takaichi did not make requests about China.
• Japanese Finance Minister Katayama said had meeting with US Treasury Secretary Bessent and discussed financial market situation, including forex, while she reaffirmed close cooperation based on joint statement last year.
• Japanese Finance Minister Katayama said the Bessent-Takaichi talks were very positive, in which they discussed Mythos and critical minerals.
• Japan's Finance Ministry declines to comment on market speculation about rate checks.
• South Korean policy chief Kim said AI citizen dividend will be from excess tax and that AI dividend does not mean a windfall tax.

European bourses (STOXX 600 -0.7%) trade with losses across the board, driven by multiple factors: 1) Iran-US war seemingly not having an end in sight, 2) UK political turmoil, and 3) mixed earnings. Overnight, US President Trump said that the ceasefire is unbelievably weak and reiterated that Iran’s proposal is unacceptable. Further reporting by Axios stated that Trump held a meeting with his national security team to discuss a way forward, which included the possible resumption of military action. This drove energy prices higher and, in turn, weighed on equities globally. European sectors are broadly in the red, with Energy outperforming as WTI and Brent regain the USD 100/bbl and USD 106/bbl respectively. Outside of Banks, Retail sits at the bottom of the pile.

Top European News

• EU ZEW Economic Sentiment Index (May) -9.1 vs. Exp. -20 (Prev. -20.4).
• German ZEW Economic Sentiment Index (May) -10.2 vs. Exp. -20.5 (Prev. -17.2, Low. -35.0, High. -10).
• German ZEW Current Conditions (May) -77.8 vs. Exp. -77.5 (Prev. -73.7, Low. -80.0, High. -68.0).
• German Inflation Rate MoM Final (Apr) M/M 0.6% vs. Exp. 0.6% (Prev. 1.1%, Low. 0.6%, High. 0.6%).
• German Inflation Rate YoY Final (Apr) Y/Y 2.9% vs. Exp. 2.9% (Prev. 2.7%, Low. 2.9%, High. 2.9%).
• Italian Industrial Production YoY (Mar) Y/Y 1.5% (Prev. 0.5%).

FX

• Snapshot: DXY is firmer this morning, benefiting from continued geopolitical uncertainty. The JPY is mildly lower, but performing a bit better vs peers after an aggressive bout of strength seen in early morning trade – potentially intervention. GBP is the clear underperformer this morning, as markets eye turmoil in the Labour Party. EUR was little moved to better-than-feared ZEW sentiment metrics.
• DXY is firmer by around +0.4%, and currently at the upper end of a 97.95-98.28 range; holding just shy of its 21-DMA at 98.31. Strength today has been facilitated by ongoing geopolitical uncertainty, with President Trump suggesting the US-Iran ceasefire is “on life support”, and repeated that Iran’s proposal was unacceptable. (Detailed analysis piece on the Newsquawk feed). Domestically, focus will shift to the US CPI report this afternoon. Headline M/M is expected to rise 0.6% (prev. 0.9%); the core metrics are expected to rise modestly from the prior.
• GBP is underperforming this morning and trades at the bottom end of a 1.3502-1.3614 range. This morning has seen Cable slip below its 21-DMA (1.3542). Next level to the downside includes the round 1.3500 mark, and a dip below that level could see a test of its 100-DMA at 1.3482.
• As it stands, PM Starmer reportedly announced that he will remain as PM, adding that he will not be setting out a timetable for departure. A move which essentially invites a leadership challenge; as it stands, the only real imminent challenge would be via Wes Streeting, though Rayner is an outside possibility. This, however, could bring further division into the Labour party, as an early challenge might split Labour between Starmer, Streeting and Burnham supporters. In the near-term, we look for a formal challenge and/or more ministerial-level resignations in a bid to pressure Starmer into changing his mind.
• JPY is mildly lower, with focus on a) potential intervention and b) Bessent-Takaichi meeting. On the point of intervention, an aggressive move lower was seen in USD/JPY from around 157.71 to 156.72 (today’s range 156.72-157.75). A move which lacked a clear driver, raising speculation of further intervention. Overnight, Treasury Sec. Bessent and PM Takaichi met where the pair discussed the financial market situation, including forex, while she reaffirmed close cooperation based on the prior accord but refrained from any significant currency jawboning. Commentary post-meeting lacked any real surprises, with the USD/JPY ultimately little moved following the details of the discussions.

Central Banks

• Fed Chair nominee Warsh clears Senate procedural hurdle and a Senate confirmation vote is expected as early as Wednesday.
• BoJ Summary of Opinions from the April meeting noted a member said that given real interest rates are at a significantly low levels, it is appropriate for the BoJ to continue raising policy rates. Member said Japan’s real policy interest rate is by far at the lowest level globally, BoJ must to continue to adjust the negative real interest rate in preparation for the second-round effects of price rise.
• ECB's Nagel said ECB mandate requires to act if inflation expectations de-anchor; "we'll see in June"; baseline includes two rate hikes.
• ECB’s Patsalides said there are scenarios in which the ECB may avoid raising interest rates.

Fixed Income

• A bearish start for fixed income as energy benchmarks climb after overnight rhetoric (see the feed for more), and with the intensifying scrutiny around UK PM Starmer weighing on Gilts and dragging peers lower as well.
• Bunds and USTs began the morning with modest losses, of a handful and around 20 ticks, respectively. While USTs haven't dipped much further, they are down to a 110-06+ low ahead of US supply and CPI. If the pressure continues, we look to 110-00+ from last week before the 109-24 contact low from March.
• Bunds saw a bout of pressure in the European morning, before the Gilt open, seemingly as the press reporting around UK PM Starmer intensified further early doors. Enough to send Bunds below the 125.00 mark.
• Gilts opened lower by 73 ticks and hit an 85.82 trough. Thereafter, UK paper trundled lower to make a contract low at 85.45 ahead of leaked comments from the PM, where Starmer reportedly announced his intention to remain as the PM. Gilts moved from 85.52 to 85.81 in the moments after his comments, as it potentially signals that Chancellor Reeves will remain at her post in the near-term. In brief, his comment essentially invites a leadership challenge; as it stands, the only real imminent challenge would be via Wes Streeting, though Rayner is an outside possibility. This, however, could bring further division into the Labour party, as an early challenge might split Labour between Starmer, Streeting and Burnham supporters. In the near-term, we look for a formal challenge and/or more ministerial-level resignations in a bid to pressure Starmer into changing his mind.
• Germany sells EUR 4.630bln vs exp. EUR 6bln 2.50% 2028 Schatz: b/c 1.4x (prev. 1.7x), average yield 2.70% (prev. 2.47%), retention 22.8%.
• UK sells GBP 4bln 4.125% 2031 Gilt: b/c 3.36x (prev. 3.33x), average yield 4.651% (prev. 4.228%), tail 0.2bps (prev. 0.3bps).
• The Netherlands sold EUR 2.745bln vs exp. EUR 2-3bln 2.75% 2036 DSL: average yield 3.209% (prev. 2.955%).
• Japan sold JPY 1.95tln 10yr JGBs, b/c 3.90x (prev. 2.57x), average yield 2.540% (prev. 2.350%).

Commodities

• In geopolitics, US President Trump said he has a plan on Iran and repeated that Tehran’s proposal is unacceptable. He added that the ceasefire is unbelievably weak and “on life support”, although a diplomatic solution is still possible. Meanwhile, Axios reported Trump met with his national security team to discuss options, including possible renewed military action against Iran. US officials said Trump still wants a deal, but Iran’s refusal to make major nuclear concessions has put the military option back on the table. Two US officials said Trump is leaning toward some form of military action to increase pressure on Iran. That being said, it was also reported that US officials said Trump is unlikely to authorise military action before returning from China later this week.
• From an Iranian perspective, Iran reiterated that enrichment is not negotiable and rejected transferring enriched uranium outside the country. An Iranian parliamentary spokesperson said one option in the event of another attack could be 90% uranium enrichment.
• In reaction, WTI and Brent futures are firmer by 3.1% and 2.6% respectively, with the former towards the upper end of USD 98-101.47/bbl range and the latter just shy of session highs (USD 104.23-107.29/bbl band). Dutch TTF is firmer by some 2.5% above EUR 47/MWh.
• Spot gold is softer amid the energy-induced rise in the USD, with the bullion hovering on either side of USD 4,700/oz (in a USD 4,686-4,773/oz band) as traders look ahead to US CPI later today, alongside further headlines risk on the US-Iran front, in which a macro update will likely ultimately dictate price action.
• Base metals are mixed/mostly lower given the cautious risk sentiment and firmer USD. Copper overnight edged higher in choppy trade amid the mixed overnight risk appetite. 3M LME copper currently resides between USD 13,831.70- 13,980.38/t.
• US released another 53.3mln barrels from Strategic Petroleum Reserve to companies including Trafigura, Marathon Petroleum (MPC), and Exxon Mobil (XOM) in an effort to ease soaring fuel prices caused by the Iran war and disruptions in the Strait of Hormuz.
• US House could vote on a gas-tax holiday as early as next week, according to multiple sources familiar with the planning cited by Punchbowl.

Trade/Tariffs

• US President Trump said need more tariffs.
• White House said US President Trump will meet with Chinese President Xi on Thursday at 10:15 AM in Beijing (03:15BST/22:15EDT) and banquet will be held at 18:00 on Thursday (11:00BST/06:00EDT). Working lunch on Friday will take place at 12:15 (05:15BST/00:15EDT).
• France presses EU to crack down on platforms like Shein and Temu, according to FT.
• US Treasury Secretary Bessent posted that he held talks with Japanese Economy Minister Akazawa; "I highlighted the continued positive collaboration between the United States and Japan on issues pertaining to critical minerals and supply chains".

US Event Calendar

• 6:00 am: United States Apr NFIB Small Business Optimism, est. 96.1, prior 95.8
• 8:30 am: United States Apr CPI MoM, est. 0.6%, prior 0.9%
• 8:30 am: United States Apr Core CPI MoM, est. 0.3%, prior 0.2%
• 8:30 am: United States Apr CPI YoY, est. 3.7%, prior 3.3%
• 8:30 am: United States Apr Core CPI YoY, est. 2.7%, prior 2.6%
• 2:00 pm: United States Apr Federal Budget Balance, est. 220b, prior -164.1b
• 9:10 am: United States Fed’s Goolsbee Radio Appearance on NPR
• 11:00 am: United States NY Fed Quarterly Report on Household Debt and Credit
• 1:00 pm: United States Fed’s Goolsbee Speaks at Greater Rockford Chamber of Commerce

DB's Jim Reid concludes the overnight wrap

Speaking of the AI race, some big overnight market moves came with a sharp drop in the KOSPI as a senior official floated the idea of a “citizen dividend” on AI profits, which has also weighed on tech sentiment overnight. Before that, chips stocks had led the S&P 500 (+0.19%) to another record high even as a renewed uptick in oil prices amid the deadlock between the US and Iran pushed yields higher. Meanwhile, UK politics are set for more headlines today, with reports of a fracturing in support for Prime Minister Starmer ahead of a potentially crucial Cabinet meeting this morning.

Starting with Iran, President Trump sowed doubts over the US-Iran ceasefire, saying that it was on “massive life support” as he called Iran’s latest offer “a piece of garbage”. Those comments came as Iran’s response to last week’s US proposal reportedly demanded a lifting of the US blockade and sanctions relief, as well as Iran maintaining a degree of control over the Strait of Hormuz. Iran’s Parliamentary Speaker Ghalibaf posted that “there is no alternative but to accept the rights of the Iranian people” as laid out in Tehran’s proposal. Meanwhile, Trump also told Fox News yesterday that he was considering reviving Project Freedom, the short-lived operation to escort ships through the Strait of Hormuz, and said he was supportive of a gasoline tax holiday, something that would require Congressional action. With the sides appearing no closer to resolving their negotiation deadlock, Brent crude prices are +0.70% higher at $104.94/bbl this morning after a +2.88% gain yesterday. Markets are also pricing rising chances of lasting disruption, with 6-month Brent futures up +2.54% to $89.50/bbl yesterday.

As mentioned at the top, the major story out of Asia this morning were comments from South Korea's presidential policy chief Kim Yong-beom proposing a "national dividend" to share in excess AI industry profits. This sent the KOSPI as much as -5.1% lower this morning, though it partially pared back this loss to-2.90% as I type, with Kim clarifying that he was suggesting tapping into “excess tax revenue” rather than introducing a new windfall corporate tax. The index heavyweight Samsung is down -3.4%. The news has also led NASDAQ futures (-0.34%) to lag those on the S&P 500 (-0.14%), while STOXX 50 futures (-0.61%) are losing more ground in Europe. But the mood is less negative elsewhere in Asia, with S&P/ASX 200 (-0.24%) as well as the CSI (-0.31%) and Shanghai Composite (-0.40%) seeing moderate losses, while the Nikkei (+0.62%) and the Hang Seng (+0.30%) are advancing.

Before that, US equities continued to advance yesterday despite the Iran stalemate, with the S&P 500 (+0.19%) and the NASDAQ (+0.10%) posting new records. Chips stocks again led the way, with the Philly semiconductor index (+2.59%) extending its YTD gain to +70%, while energy companies also surged. That said, the broader market mood was a bit more cautious, with most S&P 500 constituents lower on the day and the Mag-7 (-0.26%) slipping. Across the Atlantic, European equities were also more mixed, with the Stoxx 600 (+0.11%), FTSE 100 (+0.36%) and Dax (+0.05%) posting modest gains, while France’s CAC 40 (-0.69%) underperformed amid a fall in luxury retail stocks.
It was a more negative story in the rates space, as yields moved higher amid the rise in oil prices. The 2yr Treasury yield (+6.9bps) rose to 6-week high of 3.96%, as Fed funds futures are now pricing 15bps of hikes by next April. 10yr Treasury yields rose +5.9bps to 4.41%, whilst in Europe yields on 10yr bunds (+3.5bps) as well as OATs (+3.9bps) and BTPs (+5.2bps) all moved higher as well.

JGBs are also losing ground this morning, with the 10yr yield up +1.6bps to a new post-1997 high of 2.54%. A summary of opinions from last month’s BoJ board meeting showed policymakers considering a rate hike at the next meeting, with the central bank having grown increasingly concerned about a potential rise in underlying inflation stemming from Iran-driven disruptions. A June BoJ hike is currently 75% priced. Separately, Japanese household spending declined by a larger-than-expected -2.9% yoy in March (-1.3% expected), highlighting the fragility of consumption even as wages continued to grow.

Looking ahead to today, UK politics are set to be in the headlines again with a Cabinet split over support for Prime Minister Keir Starmer emerging yesterday. The FT reported that three ministers had asked the PM to consider his position. Starmer had said on Monday that he would not resign after suffering major losses in the UK local elections last week. But with his speech yesterday delivering little of note, aside from plans to nationalise British Steel and introduce a new EU youth scheme, more Labour MPs called on the PM to step aside in its aftermath, with the total number rising above 70. With a Cabinet meeting expected this morning, today could be a big day in determining Starmer’s future. In response to the uncertainty, 10yr UK gilt yields rose +8.6bps to 5.00% yesterday, whilst the 30yr yield rose +9.3bps to 5.67%, given expectations that a new Labour leader may face pressure to ease the fiscal rules and raise gilt issuance.

Elsewhere the day ahead will see the release of the April US CPI print. Our economists expect headline inflation to rise by +0.58% m/m, moderating from March’s +0.9%, but still relatively firm. This would raise the annual rate to 3.8%, its highest since May 2023. And they project the core reading to accelerate to +0.39% m/m from +0.2%, suggesting underlying price pressures remain sticky even as the energy price jump moderates. You can read the US team's CPI preview and register for their post-release webinar here.

Meanwhile, the US Senate is due to vote today to confirm Kevin Warsh to the Fed Board, after clearing a procedural vote by a 49-44 margin last night. A further Senate vote to confirm him for the Fed Chair position is expected later in the week before Chair Powell’s term ends on Friday. As a reminder, Warsh will be taking over Governor Miran’s place on the Board, as Powell plans to stay on as a Governor.

Otherwise on the docket today is US NFIB small business optimism, Germany May Zew survey, Eurozone May Zew survey. The Fed’s Goolbee and ECB’s Dolenc will also speak today.

Kuwait and Iran are barely separated by a small section of Iraqi coastline at the head of the Persian Gulf, but they do share a maritime border. But given the small oil-rich Sunni sheikdom's close proximity to the Islamic Republic, and given its historic role in hosting American forces and bases, it is to be expected that it would be heavily targeted in Iranian military operations.

Indeed, Kuwait has alongside the UAE absorbed some of the biggest ballistic missile and drone attacks out of Israel during the US-Israeli Operation Epic Fury. US forces have even had to retreat to other locations deeper in the Middle East or even outside the theatre, given the repeat attacks and looming threat of new attack even amid broader ceasefire.

But in tandem with an air war, there's has been a covert war happening in the shadows, with Kuwait's interior ministry newly announcing on Tuesday it has arrested four 'infiltrators' affiliated with Iran's Islamic Revolutionary Guards (IRGC). The ground attack incident is said to have happened earlier this month, and involved heavy exchanges of fire.

The elite IRGC operatives reportedly tried to enter the Gulf state by sea, per Kuwait state news agency KUNA. A firefight ensued, and the ministry later confirmed one member of Kuwait’s armed forces was seriously wounded in resulting clashes with the infiltrating small group of Iranians.

The Interior Ministry accused the IRGC operatives of seeking to launch "hostile" activities inside Kuwait. "Confession of the infiltration group to Kuwaiti territories during interrogation with them of their affiliation to the Revolutionary Guard in the Islamic Republic of Iran," the ministry stated.

It appears that only two of the Iranian group are in custody while two escaped, per an initial statement. As for the operatives in custody, "They confessed to being tasked with infiltrating Bubiyan Island aboard a fishing boat rented specifically to carry out hostile acts against Kuwait," the official Kuwaiti statement added.

Other sources, including the defense ministry, say that all four have been detained and identified, amid early conflicting reports:

Kuwait’s Defense Ministry reported on May 3 that naval Col. Amir Hossein Abdolmohammad Zaraei, naval Col. Abdolsamad Yedaleh Ghanavati, naval Capt. Ahmad Jamshid Gholamreza Zolfaghari and 1st Lt. Mohammad Hossein Sohrab Foroughi Rad had been arrested in territorial waters after attempting to infiltrate Bubiyan Island.

Kuwaiti Armed Forces stationed on Bubiyan Island exchanged fire with the men during the confrontation, resulting in severe injuries to one service member.

Bubiyan is the largest of a group of eight islands belonging to Kuwait, lying in the north-western corner of the Persian Gulf. Importantly, the large island is home to Mubarak Al Kabeer Port, part of China's Belt and Road initiative.

Kuwait is a very small country and Bubiyan Island is not some distant place but strategically located close to population centers and energy sites although the island itself is empty. pic.twitter.com/Fdd8RU3NqS

— Alberto Miguel Fernandez (@AlbertoMiguelF5) May 12, 2026

That the alleged Iranian high-risk operation focused on an island with a key China-built port is quickly becoming focus of Western media reports. According to ABC:  

Kuwait accused Iran on Tuesday of sending an armed paramilitary Revolutionary Guard team to launch a failed attack earlier this month on an island in the Middle East nation home to a China-funded port project.

The accusation by Kuwait of an Iranian link to the incident came just before U.S. President Donald Trump travels to Beijing for a meeting with Chinese President Xi Jinping.

Tehran has yet to acknowledge or own up to the incident, and is not expected to, unless it is an outright denial. 

One freight and oil transit industry headline from early March underscores just how ambitious and costly the China-backed project remains: Kuwait, China Advance USD 4.1 Billion Mubarak Al-Kabeer Port Project...

Kuwait and China have agreed to strengthen their commercial and maritime cooperation through the construction of a new container port on Kuwait’s Bubiyan Island. The project marks a significant step in deepening bilateral economic ties and enhancing the oil-rich country’s strategic position within regional shipping networks.

The Chinese majority state-owned firm China Communications Construction Company will undertake the Engineering, Procurement, and Construction (EPC) works for the project’s first phase.

The development of the new container hub in the north of the country is expected to expand Kuwait's port capacity and reinforce its role in both regional and global trade flows.

And yet, current Kuwaiti oil export flows remain forcibly halted, due to the Strait of Hormuz closure and ongoing standoff, which has on the one hand seen Iran target 'unauthorized' foreign shipping with drones and missiles, and on the other seen the US Navy maintain its own blockade of Iranian ports.

In what appears to be the first Houthi attack out of Yemen since the broader Iran ceasefire came into place starting in early April, the Israel Defense Forces said a drone "launched from the east" was intercepted by the Israeli Air Force near the southernmost city of Eilat on Tuesday.

The IDF further indicated it is believed to have been launched from Yemen, although the IDF is still investigating its origin, according to Israeli media reports. Israel's Channel 12 is citing that at least two drones were sent.

However, no sirens sounded, "according to protocol," the military said further. The Iran-allied Houthi rebels had launched several missiles and drones at Israel during the war, in support of the Iranian side.

The Houthis also played a key role during the prior two-year Gaza war, during which time ballistic missiles targeted Israel on a weekly basis, and shipping and in the Red Sea was essentially halted due to the threat of Houthi attacks.

The Shia military group further has demonstrated its ability to reach and disrupt several of Israel's airports, including the key international bub of Ben Gurion airport.

Throughout Trump's Operation Epic Fury and Project Freedom the Houthis have surprisingly stayed relatively quiet and on the sidelines. But they hold a big card in alliance with Iran - the threat of again shuttering vital Red Sea shipping and seriously denting Suez Canal traffic.

In the meantime, the close cooperation between Iran and the Houthis continues to be on display when it comes to weapons manufacturing and transfers:

The Iranian-backed Houthis in Yemen continue to use Iranian components in drones, according to a new report. For instance, “external support remains a key factor in the Houthis’ ability to sustain operations,” notes Conflict Armament Research (CAR), which compiled the report.

This is important as it illustrates how the Houthis continue to assemble advanced weapons. Any future conflict with them will need to take this into account. The Houthis burst onto the scene in 2015, moving from the mountains of Yemen and trying to take the port city of Aden.

Going back to the start of the war with the Saudis and Emirates over a decade ago, it was well understood by Western intelligence that the Houthis were able to achieve impressive ballistic missile capabilities due to the close relationship with Tehran.

At various times over the years, vessels bound for Yemen were intercepted by US military ships, and found to be transferring guns, ammo, or missile parts. Iranian parts continue to be frequently found in Houthis weapons systems.

Korean markets were under pressure overnight after politicians floated the idea of tapping AI profits. 

Bloomberg reports that a top South Korean policymaker said the nation should pay citizens a 'dividend' using taxes on AI profits, with the obvious read through to Samsung and SK Hynix. 

The comments in a Facebook post by presidential policy chief Kim Yong-beom fueled sharp swings in Korean stocks on Tuesday as investors struggled to parse the scope of the proposals.

“Excess profits in the AI era are, by nature, concentrated,” Kim wrote.

Memory companies, core engineers and asset holders in Seoul are highly likely to receive substantial benefits, while much of the middle class may experience only indirect effects, he said.

The size of any potential dividend, and other details on how Kim’s proposals might be implemented, weren’t immediately clear.

Still, investors took notice.

“After some 80% gain this year, the market was getting sensitive to any news that can trigger investor jitters,” said Kim Dojoon, chief investment officer at Zian Investment Management.

“Policy chief Kim’s post was easy to draw misunderstanding from the market at such a moment.”

The benchmark KOSPI initially plunged as much as 5.1% (more than $300 billion in market cap)...

The weakness spread into Europe and is dragging down Nasdaq futures in the pre-market...

But, as the impact of his statement spread across markets, damage control quickly hit with the influential policy adviser clarifying he wanted to tap "excess tax revenue" generated from the AI boom, rather than roll out a new windfall levy on corporate profits.

An official at the president’s office told Bloomberg News that Kim’s remarks represented his personal opinion and weren’t the subject of formal discussions.

However, the episode is the latest example of politicians calling attention to how the advent of AI risks widening the gap between the haves and have-nots.

In South Korea, that concern has surfaced in public calls for industry leaders to share more of the spoils of the global AI infrastructure rollout.

While Kim’s ideas are preliminary, if they were to be rolled out it would mark one of the first concerted government efforts to share the proceeds of the boom.

As Goldman's One-Delta desk-head, Rich Privorotsky, noted this morning, this feels like a theme that could resonate globally given the extreme concentration of AI earnings and the fact that the benefits skew so disproportionately to mega cap winners. 

The  speed of fast money/retail chasing semis, plus the proliferation of 2x/3x levered structures in Korea and the US, gives me pause about the fragility building into this rally but obviously the core of thesis, 'we need more tokens' remains unshaken.