WS #7793

The dominant narrative remains the Iran conflict and its second-order effects on energy markets, inflation, and central bank policy. The Strait of Hormuz closure persists, with IRGC halting commercial shipping and rerouting vessels. However, a potential de-escalation signal emerged: three supertankers carrying 6 million barrels of Middle East crude successfully exited the Strait of Hormuz, the first such transit in over two months. This is a counter-signal to the prevailing thesis of a complete blockade. Separately, Al Arabiya reported that the Pakistani Army Chief may visit Iran to announce a final agreement text, suggesting diplomatic progress. On the energy front, EIA data showed a massive 7.86 million barrel crude draw (vs. -2.5M est.) and a 1.55M barrel gasoline draw (vs. -2.1M est.), indicating continued tightness. UK inflation fell to 2.8% (from 3.3%) but is expected to rise toward 4% due to the Iran war. The BoE held rates at 3.75% (8-1 vote, one dissenter wanted a hike). ECB officials signaled a potential June rate hike. In corporate news, Target (TGT) reported strong Q1 results: net sales up 6.7% YoY to $25.4B, digital comps up 8.9%, gross margin improved 80 bps to 29.0%, and raised full-year sales growth guidance to ~4%. TJX Companies beat Q1 estimates and raised FY27 guidance. CAVA Group exceeded Q1 expectations with analysts boosting price targets. Former Rep. Barney Frank, architect of post-crisis bank reforms, died at 86. SpaceX IPO is reportedly targeting up to $75B raise at a $2T+ valuation. Ukrainian drone strikes continue to hit Russian oil infrastructure, with oil refining at a standstill in central Russia.