WS #10008

The dominant signal in this window is the IEA's monthly oil report, which lowers Russia's 2026 oil production forecast to 10.3 million bpd and, per the FT, warns that a Middle East peace deal could herald an oil glut next year as supply rebounds. This corroborates the previous window's IEA demand-slashing narrative, now with a supply-side bearish twist. Separately, UK inflation held steady at 2.8% in May (vs. 3% expected), easing pressure on the Bank of England and driving a five-day gilt rally. The Fed's first meeting under Chair Warsh is underway, with expectations of no rate change but a potentially dovish tone. G7 leaders pledged to boost Ukraine air defenses and tighten sanctions on Russia, while NATO's Rutte confirmed US commitment to NATO but called for Europe/Canada to do more. Iranian tankers have begun exiting the US blockade line, signaling the Strait of Hormuz reopening is underway, though NPR reports full normalization is not yet happening. China issued a 15th Five-Year Plan for employment-first strategy, aiming to stabilize jobs. The MAGA hawk mutiny against Trump's Iran deal is deepening, per Axios. On the micro side, Oracle denied reports that security concerns killed a potential $3B cloud deal with Microsoft, and Nano Dimension pushed back on activist investor criticism. The prevailing narrative is a gradual de-escalation of the Iran conflict and a medium-term oil glut, countered by ongoing supply disruptions from Ukrainian drone strikes on Russian refineries.