WS #7174

The dominant narrative remains the US-China summit with Trump in Beijing, which is now confirmed with China's foreign ministry welcoming the state visit and stating the two heads of state will discuss major issues. This is a high-signal event that could drive tech and trade-sensitive sectors. Separately, SoftBank's annual profit quadrupled to ¥5 trillion ($31.6 billion) driven by a $46 billion gain at Vision Fund from its OpenAI bet, reinforcing the AI narrative and supporting tech sentiment. On the geopolitical front, Ukraine continues to escalate drone strikes on Russian oil infrastructure, hitting the Taman port, Astrakhan gas processing plant, and Nurlino pumping station, extending pressure on Russia's oil logistics and keeping oil prices elevated. An Iran-linked LPG tanker sailed past the US Navy's blockade line in the Strait of Hormuz, a direct challenge to the blockade. However, a counter-signal emerges: UK gilt yields fell 2-5 bps across maturities as markets opened, suggesting some easing of risk premium. France's inflation rose to 2.2% in April with unemployment at its highest since 2021, indicating stagflationary pressures in Europe. India's RBI governor warned that India may need to increase retail fuel prices if the Middle East conflict drags on, and India more than doubled bullion import taxes to 15% to protect the rupee, which could pressure gold prices and impact miners. The US-China summit is ESCALATING as the key catalyst, while the Strait of Hormuz situation remains tense but with a potential de-escalation path via the UN resolution. The Ukraine-Russia energy war is ESCALATING.