Asian stocks rose for a third day but momentum slowed as investors assessed the US-Iran deal. Chinese stocks fell after retail sales contracted for the first time since COVID. BOJ raised rates by 25bp to 1%, kept bond purchases steady, triggering a relief rally in stocks and yen gains.

European stocks and bonds continued yesterday's moves. UK 10-year yields fell 2bp ahead of CPI and BOE decision. Cyclical sectors like industrials and banks led gains. With the energy squeeze over, investors may rotate back into European stocks which have lagged year-to-date without AI names.

Oil headed for longest losing streak as US-Iran deal to reopen Strait of Hormuz reshapes supply outlook. Despite Trump's claim of immediate reopening, shipments may take weeks to months to return to pre-war levels. LNG shipments could be at 50% capacity within a month, 80% within two months. Lebanon remains a sticking point in negotiations.

Bond markets have reacted mildly to the oil drop because traders believe inflation will persist for longer due to damage from higher oil prices since February. Brent crude is still 12-13% above pre-war levels. Markets price in at least one more ECB and BOE rate hike this year. BOJ disappointed by not signaling faster pace - the 3-6 month gap between moves is too slow given inflation. Fed's Warsh may lean dovish using alternative inflation measures.

BOJ's 25bp hike to 1% was a watershed but not enough - USD/JPY still above 160. Deputy governor's hawkish lines showed confidence but market wants evidence BOJ isn't behind the curve. BOJ may hike again in December but no confidence in faster pace. For Warsh's first FOMC, key is whether he'll be politically motivated to adopt a dovish framework using alternative inflation measures. Two-year yield at 4.05% pricing in 15bp of hikes may not materialize if Warsh leans dovish.

Anthropic is trying to convince the Trump administration to lift the ban on its advanced AI models by fixing guardrails. The sophistication of models like Mythos and Fable 5 has spooked governments and may accelerate sovereign AI development. OpenAI's losses swelled to $34B on $20B revenue - sustainable short-term due to massive AI investment flows. NVIDIA's first debt raise taps into strong AI capital markets appetite.

G7 main focus is the Iran war and ceasefire announced at the summit's dawn. Trump is trying to sell the deal as a breakthrough, but European leaders are skeptical about full Strait reopening by Friday. Europeans offered demining help but only after a clear peace agreement. Italy's Meloni won't be involved until there's a full agreement including Lebanon. Unlikely there will be a clear joint communique on Iran.