WS #7775

The dominant signal in this window is the UK inflation data release, which came in below expectations at 2.8% YoY (vs. 3.0% consensus), alongside a core inflation miss at 2.5% (vs. 2.6%). This is a disinflationary surprise that could ease pressure on the Bank of England to hike rates, providing a tailwind for UK equities and gilts. However, the relief is tempered by rising bond yields globally, with the 30-year Treasury yield hitting 5.19% (highest in ~19 years) and the 10-year at 4.687%, as highlighted by HSBC's 'Danger Zone' warning. The bond selloff continues to pressure equities, with the S&P 500 and Nasdaq logging their third consecutive session in the red. On the geopolitical front, the UK has loosened sanctions on Russian oil refined into diesel and jet fuel in third countries, a counter-signal to the prevailing oil supply disruption narrative. This move, driven by rising fuel prices and Strait of Hormuz blockade concerns, could dampen the bullish oil thesis. Additionally, the Xi-Putin large-scale meeting has ended, with no new escalatory announcements, suggesting a stable geopolitical posture. Tesla is stepping up urgent FSD hiring in China, a positive signal for TSLA's autonomous driving timeline. Nvidia earnings are due after the close, with options structure showing weakness, indicating potential downside risk. The overall narrative is one of disinflationary data (UK CPI miss) countered by persistent bond yield pressure, with geopolitical oil supply fears partially offset by UK sanctions easing.