In 30 seconds: A conflict-driven disruption at the Strait of Hormuz has halted Iranian crude loadings at Kharg Island, prompted record US Strategic Petroleum Reserve releases, pushed Brent crude above $100 per barrel, and raised fears of a prolonged supply shock as Qatar LNG tankers attempt passage. China's vehicle exports are on track to approach 12 million units this year—surpassing peak German net exports—as surging overseas sales mask a significant contraction in domestic auto demand, while US-China trade talks appear focused on symbolic Boeing and soybean purchases rather than structural issues. The S&P 500 has notched its 16th all-time high of 2026 with a historic 16% six-week surge that is unique in not following a bear market, though some analysts are warning the move has bubble-like characteristics. UK 10-year gilt yields are hovering just below 5% as higher oil prices and domestic political instability surrounding Prime Minister Starmer's government combine to pressure the bond market.
The thing about chokepoints is that they work. Satellite imagery shows no supertanker loadings on May 8, May 9, and May 11 — what looks like the longest stretch without loadings since the early days of the war. Prompt Brent futures: $103 per barrel. The assessment is blunt: the record supply deficit is here. The Qatar-owned LNG tanker Mihzem is nearing the mouth of the Strait of Hormuz, signalling Pakistan as destination, heading via the Iranian shipping lane. Washington has been releasing oil from the Strategic Petroleum Reserve at a record weekly rate of 1.22 million barrels per day, or 8.6 million barrels last week. Japan is burning through its own stockpiles at roughly 1.5 million barrels per day. These are not subtle numbers. On the demand side, President Trump tells CBS News he wants to 'pause' the U.S. federal tax on gasoline, currently about 18 cents per gallon. Republican Senator John Hawley is introducing legislation to fulfill the White House's desire to pause the federal gas tax. US federal gasoline tax: ~18 cents per gallon of gasoline. Luke Gromen would take the 'over'. The theory goes that a 10-year Treasury yield at 4.4 is the number at which Trump says 'No more war.' Gold, for its part, closed at $4,744.50, up 0.5106% on the day. Safe havens are doing what safe havens do.
China's auto sector is a near-perfect metaphor for the broader economy: domestic demand is down, quite significantly, while exports are on a rocket ship up. In April, China shipped 0.8 million passenger cars abroad against just 1.4m in domestic sales. That is an absolutely massive swing for a country whose auto industry was domestically focused just five years ago. China's annual increase in car exports — roughly 2.5 million vehicles — has already surpassed peak German net car exports of around 2 million vehicles, all while domestic demand for both ICEs and EVs is now shrinking. China EV exports are running at an annualized rate of 4 million vehicles, or roughly 1 million a quarter. Strip out the export surge and China's auto sector would be in a recession — domestic demand alone cannot sustain current output levels. The overcapacity gap is enormous: production capacity exceeds 50m vehicles against domestic demand of roughly 22m. The rumor is that China will confirm a 737 order soon while holding off on widebody orders until a December summit.
The S&P 500 closed at 7,412.84 on 2026-05-11, up 0.19% on the day. The index has now posted 16 all-time highs in 2026, a pace that matches 1993 through the same stretch of the calendar. The more striking statistic is the 16% rally over the last 6 weeks, which ranks as the 11th largest 6-week gain since 1950. That sounds impressive in the way that most superlatives involving decades of data sound impressive, but the context is what matters. This rally stands as the only example in the top 20 that did not occur either during a bear market or soon after a bear market low. This rally has no such excuse. The market just decided to go up a lot, very quickly. Which brings us to the bubble question. At least one market commentator is calling a bubble, though not calling the top. The distinction is important. The market is doing something historically unusual, and everyone can see that it is historically unusual.
Traders are laser-focused on four internal questions dictating the near-term outlook for gilts. Domestic political instability is magnifying the pain of higher oil prices for UK Gilts. Domestic political developments are magnifying the pressure on gilts, with the 10-year yield now hovering just a fraction below the 5% mark.
Here is what your weekly spend looks like right now.
Groceries (CPI food at home): 343.51, up 0.01% on the month
Eating out (CPI food away from home): 346.60, down 0.01% on the month
Average hourly earnings: $37.41, up 0.16% on the month