Monday, 25 May 2026

Top of the morning

• The White House signals an Iran deal announcement may be close

  Officials indicated a formal announcement on ending the war could come shortly, the most concrete framing yet after weeks of intermittent talks. US and Iranian negotiators are described as inching toward agreement, but two issues are still unresolved: the fate of Iran's enriched-uranium stockpile, which Washington wants surrendered, and the design and sequencing of sanctions relief. Markets have chosen to trade the optimistic interpretation — though, as before, the constructive language remains a promise rather than a signed text.
• Crude tumbles roughly 6% as Gulf shipping starts to move again

  WTI fell about 5.7% to near $91 a barrel and Brent dropped a similar amount, as deal optimism met the first hard evidence that traffic through the Strait of Hormuz is reviving. A supertanker carrying Iraqi crude was reported leaving the Persian Gulf, and Qatar has quietly resumed LNG shipments through the strait to key buyers. After months of a war premium that pinned oil near multi-year highs, the market is now pricing a path back toward normal flows — a meaningful relief for the inflation outlook if it holds.
• Equities cling to record territory on the energy relief

  Global stocks are sitting just below record highs, with falling energy costs easing the inflation worry that had been the main threat to the rally. With US cash markets closed for Memorial Day and the UK shut for its spring holiday, the tape is thin and the lead is coming from continental Europe and Asia. The risk remains that equities are priced for a clean resolution of the Iran conflict that has not yet been delivered.
• The bond market braces for the Warsh-era Fed

  Treasuries are entering the Kevin Warsh chairmanship with traders openly pricing the possibility of a rate hike in 2026 — a striking shift in expectations. Strategists caution that long-dated yields could stay elevated even if the Iran war ends, given sticky inflation and a heavy supply of issuance. Cutting the other way, White House economist Kevin Hassett argued that an end to the war could create room for the Fed to ease. The two-way debate captures a genuinely unsettled rate outlook.
• The ECB tilts hawkish ahead of its June meeting

  President Christine Lagarde said the ECB is likely to revise its inflation projections at the June meeting, declining to say whether that points toward a rate increase. Governing Council member Martin Kocher was more direct, warning that the war's upward pressure on prices is building the case to hike. After a long easing cycle, a European central bank actively discussing tighter policy is a notable turn — and one that helps explain the firmer euro.
• Ebola outbreak in DR Congo may have killed more than 200

  The outbreak in the Democratic Republic of Congo is now estimated to have caused over 200 deaths, with armed violence in the affected region disrupting the public-health response. Reporting framed the central problem starkly: the world had built a playbook for Ebola, but not for an outbreak unfolding inside an active conflict zone, where contact tracing, vaccination and treatment are all far harder to deliver. A situation worth watching closely on the global-health side.
• China launches a surprise crackdown on cross-border stock trading

  Beijing introduced unexpected curbs on cross-border equity trading; brokerage Citic estimated the measures could affect around $32 billion of Hong Kong-listed assets. Separately, a deadly coal-mine blast pushed Chinese coal prices and mining stocks sharply higher and renewed scrutiny of the safety costs of the country's energy-security push. Both are reminders that policy and operational risk in China can move markets independently of the Iran story.

Markets snapshot

Levels from the Bloomberg Europe live ticker, read this morning. US equity and bond markets are closed today for Memorial Day, and UK markets are shut for the Spring Bank Holiday, so several figures reflect Friday's last print rather than live trading.

Global markets & macro

The defining move this morning is in oil. WTI down nearly 6% to around $91, with Brent close behind, marks the clearest unwinding of the Iran war premium since the conflict began — and it is being driven by substance, not just sentiment. A supertanker of Iraqi crude leaving the Gulf and Qatar resuming LNG flows through Hormuz are the first concrete signs that the chokepoint is reopening. Cheaper energy is the single most direct channel through which the conflict has fed global inflation, so a durable drop in crude would hand central banks meaningful breathing room.

That is why the rate picture is suddenly so interesting. The Treasury market is adjusting to the start of the Warsh era at the Fed with bets on a possible 2026 hike, even as the White House argues that peace could instead open the door to cuts. The ECB, meanwhile, is leaning the other way: Lagarde has flagged a June revision to the inflation outlook, and at least one Governing Council member is openly pushing to tighten. The result is a genuinely two-sided macro debate — falling oil pulls one way, sticky underlying inflation and the FT's reminder of a multi-decade high in long yields pull the other. Thursday's US core PCE print, which sat at 3.2% year-on-year last month, will be the first hard read on which force is winning. Equities, near record highs, are for now siding firmly with the optimists. In corporate news, Uber proposed taking over Delivery Hero at a roughly €10 billion valuation, and Anthropic is reported to be closing a funding round of more than $30 billion.

Geopolitics & world news

The Iran war remains the variable that matters most for the global tape, and for the first time the signals are more than rhetorical. The White House suggesting an announcement is imminent, combined with tankers actually moving through the Gulf again, is a qualitatively different picture from the on-again-off-again talks of recent weeks. The caveats still stand: Iran's enriched-uranium stockpile and the shape of sanctions relief are unresolved, and a framework is not a signed agreement. But the direction of travel has shifted, and oil's slide shows the market believes it.

Two other stories deserve attention. In the Democratic Republic of Congo, an Ebola outbreak with a death toll now estimated above 200 is being made far worse by armed conflict that is obstructing the medical response — a grim illustration of how a disease the world knows how to fight becomes intractable when it strikes a war zone. And in China, Beijing's surprise curbs on cross-border stock trading, alongside a fatal coal-mine disaster that jolted commodity prices, are a reminder that Chinese policy and industrial risk remain independent sources of market volatility regardless of how the Gulf story resolves.

Week ahead (CET)

• Mon 25US Memorial Day & UK Spring Bank Holiday — US and UK stock and bond markets closed; thin global liquidity, with continental Europe and Asia setting the tone
• Thu 28US core PCE (Fed's preferred inflation gauge; 3.2% y/y last month) · durable goods orders · Q1 GDP second estimate · initial jobless claims · personal income & spending
• WatchAny formal US–Iran deal announcement · the pace of Strait of Hormuz reopening and tanker traffic · whether WTI holds its drop toward $91 · the durability of equities near record highs on a thin holiday tape
• AheadJune FOMC — the first decision of the Warsh era · ECB June meeting, with Lagarde's flagged inflation-outlook revision · BoJ June meeting · OPEC+ recalibration if Gulf supply genuinely returns