Summary

• Rubio confirms that there’s been no deal and that “we’re not there yet” – amid broader late morning pushback against morning optimistic, premature headlines.
• Saudi sources report Pakistan army chief & a Qatar delegation en route to Tehran, only for CBS to cite Pakistan Foreign Ministry which says “not aware” of Field Marshal Munir’s visit.
• Influential Iranian parliament member threatens ‘preemptive’ military action if preparations & movements by US forces in region is perceived. 

Pakistan FM: “Not Aware of Any Visit” to Iran by Army Chief

In a quick market update, Newsquawk says risk-off as reporters push back on optimistic geopolitical reporting + Rubio says not there on Iran deal.

And this bit of serious contradiction of earlier reports, via CBS:

Pakistan’s Foreign Ministry spokesman Tahir Andrabi said Friday that he was “not aware of any visit right now” when asked about reports by Iranian state media since Thursday that Army chief Field Marshal Syed Asim Munir, a key mediator between Iran and the U.S., was expected in Tehran.

“I am sure this will be announced in due course, if it is to be announced. I can neither confirm nor deny it now,” Abdrabi said.

“As regards the details of any agreement, our consistent position on this matter is that we do not talk of specifics. As a mediator and as a facilitator, it is the inherent ingredient of our mandate that we remain quiet on the individual positions and the process — also not ascribe any adjective to the process i.e. fast, slow, medium,” said Adrabi, adding that he would “stick to this consistent position.”

Pakistan, Qatar Delegations En Route to Tehran

Despite the attempts of some regional outlets to spin a narrative of imminent peace (which we saw yesterday), a senior Iranian source told Reuters on Thursday that “no deal had been reached with the US” – though he did also claim that “gaps had narrowed” – somewhat in line with the optimistic narrative.

The Islamic Republic is reportedly still reviewing the latest peace blueprint handed down by the Trump administration. However, this is the latest from a Wall Street Journal correspondent:

Source tells me the draft “deals” circulating are inaccurate.

— laurence norman (@laurnorman) May 22, 2026

Trump has meanwhile explicitly warned that further military action remains firmly on the table if Tehran doesn’t bend the knee. Yet there’s more ‘action’ taking place in the interim – as Pakistan’s army chief once again is on his way to Tehran, per Al Arabiya, and this – though already previewed the day prior – caused oil to dump amid the usual daily optimistic headlines emerging just ahead of the US market open. And in an apparent first, Qatar is sending a delegation too:

Futs hits session high on Reuters report Qatar has sent negotiating team to Tehran with the US team to help secure a deal to end war.

Field Marshal Asim Munir is expected to receive and relay Tehran’s answer to Washington on the latest.

Iran Threat of ‘Preemptive’ Military Action

Meanwhile, speaking to state television, Fadahossein Maleki, an influential member of Iran’s Parliament’s National Security and Foreign Policy Committee, strongly hinted that Iran might not wait around to be hit. When pressed on whether the ceasefire could collapse, Maleki bluntly stated, “Anything is possible.”

He took it a step further, openly floating the idea of an Iranian preemptive strike if Iran believed the Pentagon is moving its forces into position for resumption of military action.

“It could even come from Iran’s side, frankly,” Maleki warned, according to a report by Iran International. “If we feel that something is happening from a US base, Iran has the legitimacy to respond and prevent it.”

Despite these threats, US Secretary of State Marco Rubio has freshly said there has been some “slight progress” in talks with Iran to end the war, but followed by saying he did not wish to exaggerate how much.

Which helped push crude oil prices to the lows of the day…

More possibly premature reports of a ‘final draft’ being worked on…

🔴 BREAKING: The final draft of a possible agreement between the United States and Iran, mediated by Pakistan, is expected to be announced within hours, according to Al Arabiya sources. Its key terms include the following:

🔴 Final draft of possible US-Iran agreement mediated by… pic.twitter.com/Fb0gTmv8nd

— Al Arabiya English (@AlArabiya_Eng) May 22, 2026

Rubio Condemns Toll System: Unacceptable

Rubio is going full press against Iran’s efforts to impose a Hormuz toll system under its own permission protocols. “They’re trying to convince Oman, by the way, to join them in this tolling system in an international waterway. There is not a country in the world that should accept that. I don’t know of a country in the world that’s in favor of it, except Iran, but there’s no country in the world that should accept it,” Rubio said in Helsingborg, Sweden, on the sidelines of a NATO ministers meeting. 

“I don’t know of anyone in the world that should be in favor of a tolling system in an international waterway, that’s just not acceptable. It can’t happen,” Rubio continued.  

“If that were to happen in the Strait of Hormuz, it will happen in five other places around the world. Why would countries all over the world say, ‘Well, we want to do this too’? Not to mention how vital and critical that strait is to every country represented here today, but frankly, to countries not represented here today, particularly the Indo-Pacific,” he also said. Importantly, he also confirmed there’s as yet no deal – which should be obvious to all. He underscored “we’re not there yet”.

More Headlines

More latest developments via Newsquawk:

• Arabiya and Al Hadath exclusively report the text of the anticipated US-Iran agreement in case of its approval. The agreement includes: an immediate, comprehensive, and unconditional ceasefire on all fronts, a halt to military operations, ensuring freedom of navigation in the Arabian Gulf, the Strait of Hormuz, and the Sea of Oman and establishing a joint mechanism for monitoring and resolving disputes.
• US Secretary of State Rubio said there has been slight progress on Iran. Iran is trying to create a tolling system in the Strait, and no nation should accept that. We will be continuing talks with Iran, and there is progress.
• “A Pakistani source says that cautious optimism is the prevailing sentiment in the ongoing discussions regarding the planned agreement.”, Al Arabiya reported.
• Pakistan source said the US and Iran’s insistence on raising the bar for their demand regarding uranium and the Strait of Hormuz has led to a “crisis in negotiations”, Al Jazeera reported.
• Pakistani Interior Minister met again with Iran’s Foreign Minister to study proposals for resolving disputes between US and Iran, Al Jazeera reported, citing the Pakistani Embassy.
• Pakistan’s Interior Minister will remain in Tehran on Friday to continue consultations and meet with Iranian officials, while a high-level source said the Pakistani Army Chief would not travel to Tehran on Thursday night, according to Al Arabiya.
• Pakistan’s Foreign Ministry spokesperson said China supports mediation efforts and has presented a 5-point initiative.
• Iranian National Security Commission member Rezei posted “These negotiations are probably also a hoax and the Americans have no desire for diplomacy”; says “instead of diplomats, send missiles to negotiate.”
• Iranian Foreign Ministry said “Everything being circulated about the status of the negotiations is not accurate”, Al ArabyTV reported.
• UAE official said there is a ’50-50′ chance of US-Iran Strait of Hormuz agreement, AFP reported.
• Unconfirmed reports of explosions in the UAE, Tasnim reported. Details of the explosions have not yet been released.
• Iraqi ports said search teams have been mobilised within territorial waters after contact was lost with two ships, while they did not receive any distress calls from the two Bolivian-flagged ships with which contact has been lost.

By Teeuwe Mevissen, Senior Macro Strategist at Rabobank

Since the start of the Iran war the market has had a tendency to view the likelihood of a peace agreement with a ‘glass half full’ attitude.

Once again, markets have found some comfort in encouraging remarks from both the US and Iran, even though both sides are making it clear that there are still major sticking points on critical issues.

US Secretary of State Rubio has suggested that there are “some goods signs” towards finding a resolution. This is despite Iran’s Supreme leader ordering that the country’s enriched uranium must not be sent abroad, which is a key objective of both the US and Israel. Rubio has also stated that any deal that involved Iran imposing tolls on shipping passing through the Strait of Hormuz would be unacceptable. This statement comes on the heels of this week’s news that Iran is looking to set up a new “Persian Gulf Strait Authority” to exert control over a maritime zone in the area and that the country’s authorities are also discussing with Oman how to set up a permanent toll system. Amid the confusion over the degree of progress towards peace, Brent crude prices have ticked higher this morning, though they remain in the lower part of this week’s range.

Reflecting movements in oil prices, US treasury yields are also trading in the lower part of this week’s range, though they remain at elevated levels. While asset prices continue to take their cue from speculation regarding the length of time that the Strait of Hormuz may be closed, economic data are increasingly reflecting the impact that the supply shock is already having.

Yesterday’s release of French preliminary May PMI data showed a plunge in the composite number to 43.5 from 47.6 the previous month, with weakness evident in both the manufacturing and the services sectors. The composite number, which is a 66-month low, would usually be associated with recession.

According to S&P Global, firms cited higher fuel and energy costs as reasons for lower output, with manufacturing firms citing material shortages.

The German PMI data was less of a shock but with a composite number reading 48.6, the economy is continuing to show signs of contraction. While this morning’s German IFO release was a little better than expected, it remains close to a 5-year low.

Yesterday’s release of the spring forecasts from the European Commission reflected the growing pessimism regarding the economic toll of the Iran war. GDP growth in the EU is now projected to slow to 1.1% in 2026, a downward revision of 0.3 ppts from the autumn forecasting round.

Growth for the Eurozone this year is now projected to be just 0.9%, while price pressures have been revised higher. The EC’s forecast for inflation in the EU has been revised a full percentage point higher to 3.1% in 2026. The forecast for the Eurozone stands at 3% this year up from an autumn forecast of 1.9%.

The data highlight the conundrum for the ECB. Price pressures are of clear concern, but weak activity data question whether the ECB needs to hike rates as much as markets have been expecting to rein back demand in the face of the supply shock. This morning the market is priced for a little more than two 25 bps ECB rate hikes on a 6-month view. Rabobank has pencilled in just one for now.

How weakening economic activity will impact central bank decisions has been a theme in many parts of the G10 this week. The releases of softer than expected UK and Australian labor data earlier in the week had a noticeable impact on rate hike expectations in their respective markets. Weak UK retail sales data this morning have further shone the spotlight on growth risks.

Cost of living pressures have been highlighted by UK voters as a primary concern and PM Starmer’s leadership continues to hang by a shoestring. In an effort to grapple back some control, the (current) Labour party leadership have this week announced steps to ease pressure on household budgets. This includes extending a freeze on fuel duty, cutting VAT on some hospitality services over the summer, and granting a 12-month road tax holiday for hauliers.

The package of measures will be funded by bringing forward changes to how oil and gas companies are taxed on overseas earnings. UK Chancellor Reeves’ adherence to her fiscal rules have won her some credibility in the gilts markets. Concerns that a leadership challenge would result in a swing to the left of the party and bring more spending pledges have unsettled the gilts market this month, though comments earlier in the weeks from Manchester Mayor Burnham that he would maintain the fiscal rules if he led the country have provided some reassurance.

Burnham may be the bookies’ favorite for the next leader of the UK’s Labour party, but he must win a seat in parliament before announcing a challenge. The most likely date for the Makerfield by-election is June 28. Reform will be fighting hard to win that seat ahead of Burham.

President Trump announced in a post on Truth Social late Thursday that he will send 5,000 additional troops to Poland, which has raised a lot of questions and introduced some level of confusion, given this is precisely the same number of troops the Pentagon has announced it plans to pull out of Germany.

“Based on the successful Election of the now President of Poland, Karol Nawrocki, who I was proud to Endorse, and our relationship with him, I am pleased to announce that the United States will be sending an additional 5,000 Troops to Poland,” Trump wrote.

Weeks ago, the White House began threatening a significant and historic force reduction from Germany, following Berlin officials’ repeat criticisms of the US-Israeli war against Iran. This was initially presented in media reports as part of a broader drawdown from Europe, but now it appears US forces are just being shifted around, and with 5,000 to be placed closer to Russia.

All of this was first reported and confirmed by Punchbowl News’ Briana Reilly, citing the words of House Armed Services Committee Chairman Rep. Mike Rogers (R-AL)…

HASC Chair Rogers said the 5k troops will be moved from Germany to Poland. This is separate from the delayed deployment of the Texas-based Army brigade. https://t.co/LTLsgSrDAe

— Briana Reilly (@briana_reilly) May 21, 2026

Rogers indicated that the 5,000 new troops for Poland will be in addition to the delayed deployment of 4,000 US Army soldiers to Poland.

As it stands, reports from a week ago suggest that the 4,000 has been paused or even canceled, with Pentagon commanders cited in media reports saying they were “blindsided” by the decision.

Some of this surprise and frustration was echoed in public, with Lt. Gen. Ben Hodges, the former commander of the U.S. Army in Europe, stating that the Army’s role in Europe “is all about deterring the Russians, protecting America’s strategic interests and assuring allies.”

But it remains that “now a very important asset that was coming to be part of that deterrence is gone.” He added: “The Poles certainly have never criticized President Trump, and they do all the things that good allies are supposed to do. And yet, this happens.”

Trump’s announcement that he’s sending a separate contingency of 5,000 to Poland could be an effort to smooth over Pentagon fears, while keeping European allies happy, and seeking to demonstrate the US is not ‘backing down’ from Russia. 

Germany itself can’t complain too loudly either, given it too has long been worried about Russia, and now more US forces are en route to NATO’s ‘eastern flank’. This move might have even been long in planning, with Washington trying to spin everything in terms of punishment and reward actions.

It has been a tumultuous week for Standard Chartered CEO Bill Winters.

Winters appeared out of touch with the growing anxiety surrounding mounting white-collar AI-related job losses. He described the bank’s AI adoption push as “not cost-cutting,” but rather as “replacing lower-value human capital with financial and investment capital.”

Such language ignited a firestorm for the CEO and the bank, and by the end of the week, regulatory scrutiny had descended on the firm.

Reuters reports that authorities in Hong Kong and Singapore have pressed the bank for clarity on Winters’ comments and the scope of upcoming AI-related layoffs.

On Tuesday, StanChart began labor restructuring to cut 15% of its corporate roles (about 7,800 jobs) by 2030 as part of a broader efficiency push amid the adoption of AI.

Hong Kong authorities asked StanChart whether AI was being used as a pretext to reduce headcount.

By midweek, Winters scrambled into damage control following the “lower-value human capital” remarks. Early today, he apologized for his “choice of words” in a LinkedIn post.

“For that, I am sorry. I am therefore showing below a verbatim transcript of what I actually said, which I hope allows for a better understanding of the important point I was raising…”

Here’s the transcript:”

“For example, this new core banking system in Hong Kong, which is a major, major accomplishment. This is not an everyday thing. It happens once in 40 years. And when it goes wrong, it’s a disaster. It did not; it was practically perfect. That was a two and a half year programme, to get that right. The people that were gonna be affected, who were very important for helping us get to the right answer, knew that they were gonna be affected, and we began reskilling them at the earliest possibility. We’re not long on talent in the markets where we operate, because these markets are growing fast. So the people that want to reskill, that want to carry on, we’re giving every opportunity to reposition. And the people that say, yeah, you know, I’ve done my bit, I’m ready to do something else. I take a package at the end of the application migration. So this isn’t, it’s not cost cutting. It’s replacing, in some cases, lower-value human capital with the financial and investment capital we’re putting in. But almost always, with good clear notice going forward.”

Beyond StanChart, corporate America is firing engineers and other white-collar workers as AI adoption accelerates. This era will likely be remembered as the great “white-collar purge,” and the response may be continued backlash toward data centers.

Meta Platforms began firing 8,000 workers earlier this week, while leaked audio of CEO Mark Zuckerberg described how AI is monitoring highly skilled employees. According to X user Official Layoff, who leaked the audio: “AI is replacing the contractor. Then the employee trains the AI. Then the AI replaces the employee.”

Take a look at Bloomberg story count data for “ChatGPT” and “layoffs” …

Labor-market disruption for white-collar workers has arrived with the rise of AI adoption. In 2023, Goldman detailed just how many jobs AI may eliminate. That number is absolutely alarming.

The average rate on a 30-year fixed mortgage climbed to its highest level since August, threatening to derail the spring selling season as higher Treasury yields and renewed inflation pressure push loan costs higher and freeze more prospective buyers out of the market.

Freddie Mac data released Thursday show the 30-year fixed mortgage rate for the week ending May 21 jumped to 6.51% from 6.36%, the highest rate since Aug. 28, 2025.

Soaring mortgage rates stem from turmoil in the Gulf region, with the U.S.-Iran war driving up oil prices, inflation, and bond yields over the last three months. Rates on 10-year Treasuries hit their highest level in one year, while 30-year yields neared 2007 highs. 

Mortgage rates fell to around 6% in early February, lifting hopes for a housing market rebound after three consecutive years of depressed activity. Yet hopes for a robust selling season were dashed because the conflict in the Middle East began in late February, and once the Hormuz chokepoint closed, energy prices surged, followed by rates.

“Each uptick in rates narrows the pool of buyers who can make the numbers work,” Realtor.com analyst Anthony Smith told News Corp.

The impact of higher rates is significant for buyers: Before the conflict, a buyer with a $2,500 monthly budget and 20% down could afford about a $400,000 home at a 6% mortgage rate, but only about $384,000 at a 6.5% rate.

Realtor.com analyst Jake Krimmel told Bloomberg, “We’ve been surprised so far that we haven’t seen deterioration like we did this time last year.” 

“May is where the rubber will meet the road because that’s when things tend to really start picking up,” Krimmel said. 

The end result of surging rates over the last few months was flat existing-home sales in April, well below Bloomberg Consensus expectations.

The continued housing market slowdown, which feels like an eternity for those in the industry, has pressured businesses tied to housing, such as furniture manufacturers, home builders, mortgage lenders, and real estate brokerages.

Home improvement retailers such as Home Depot and Lowe’s warned this week that consumers remain reluctant to splurge on big-ticket home improvement items, as elevated mortgage rates, high home prices, energy inflation, weakening sentiment, and broader macroeconomic uncertainty weigh on demand.

Lowe’s CEO Marvin Ellison warned analysts earlier this week that the housing market is the “most difficult” since the financial crisis. 

He continued:

I think overall this has been the most difficult housing market that I’ve faced in this business since the financial crisis. And as Brandon mentioned, it’s almost exclusively or disproportionately on the DIY customer.

That’s the majority of where our revenue comes from. And so I look at it from this perspective, you know, we’ve delivered four quarters of positive comps in an environment where the DIY has faced more economic pressure than I’ve ever seen before.

Housing affordability for first-time homebuyers remains at a four-decade low.

“Decisions made during the period of ultra-low interest rates coming out of the pandemic are still shaping behavior,” said Torsten Slok, the chief economist at Apollo Global Management, citing the unwillingness of homebuyers with sub-4% rates to move. “The shift to higher rates has fundamentally changed the economics.”

“If you’re looking for relief on 30-year conventional mortgage rates, you’re not going to get it anytime soon,” said Kevin Flanagan, head of investment strategy at WisdomTree.

Nick Barta, a regional manager at Security First Financial, a Colorado-based mortgage company, told Bloomberg that the surge in rates because of the US-Iran war has had a chilling effect on the industry so far. 

“All you hear about is gas prices and higher interest rates,” said Barta, who has worked in the mortgage industry for nearly four decades. “It freaks people out.”

President Trump has directed Fannie Mae and Freddie Mac to begin buying $200 billion in mortgage-backed securities to pressure mortgage rates lower.

“FHFA and the administration are actively evaluating a range of tools and policy options to improve affordability and expand access to homeownership for American families,” Federal Housing Finance Agency Director William Pulte said.

Sarah Wolfe, a senior economist at Morgan Stanley Wealth Management, warned that higher mortgage rates continue to leave an entire generation of homebuyers stuck in rentals.

“They want the same things as the generation before them,” Wolfe said, “and the bar to entry is getting higher and higher.”

Authored by Owen Evans via The Epoch Times (emphasis ours),

The United States has removed U.N. special rapporteur Francesca Albanese from its sanctions list, according to a May 20 notice posted by the Treasury Department’s Office of Foreign Assets Control.

The notice said Albanese, listed as Francesca Paola Albanese, had been deleted from the Specially Designated Nationals list under an International Criminal Court-related sanctions program.

The sanctions barred her from entering the United States and banking there.

The move came a week after a federal judge temporarily blocked enforcement of the sanctions, finding that the Trump administration likely violated Albanese’s free-speech rights by imposing the measures.

Albanese, an Italian lawyer based in Tunisia, serves as the “U.N. special rapporteur on the situation of human rights in the Palestinian territories occupied since 1967.”

She has repeatedly accused Israel of committing genocide in Gaza, allegations Israel has rejected.

The United States had placed Albanese under sanctions in July 2025 under an executive order targeting people accused of assisting International Criminal Court actions against the United States or its allies.

“The United States has repeatedly condemned and objected to the biased and malicious activities of Albanese that have long made her unfit for service as a Special Rapporteur. Albanese has spewed unabashed antisemitism, expressed support for terrorism, and open contempt for the United States, Israel, and the West,” U.S. Secretary of State Marco Rubio wrote at the time.

The sanctions barred U.S. persons from doing business with her and blocked any property or interests in property under U.S. jurisdiction.

Albanese has denied any allegations of anti-Semitism.

Albanese’s husband and daughter, who is a U.S. citizen, sued the Trump administration in February this year, alleging that the U.S. sanctions are “effectively debanking her and making it nearly impossible to meet the needs of her daily life.”

In October 2024, Albanese published a U.N. report titled “Genocide as colonial erasure,” in which she argued that Israel’s campaign in Gaza should be viewed within a broader “settler-colonial” framework.

“Since its establishment, Israel has treated the occupied people as a hated encumbrance and threat to be eradicated, subjecting millions of Palestinians, for generations, to everyday indignities, mass killing, mass incarceration, forced displacement, racial segregation, and apartheid. Advancing its goal of ‘Greater Israel’ threatens to erase the Indigenous Palestinian population,” she wrote.

The “settler-colonial” framework is often associated with left-wing, postcolonial, and critical-theory scholarship.

Australian free-market think tank Institute of Public Affairs (IPA) explicitly calls settler-colonial theory an “unsettling Marxist ideology” as the academic field was founded by British-born prominent social anthropologist and historian Patrick Wolfe, who drew on Marxist theory.

In 2024, a United Nations watchdog called for an immediate probe into alleged ethical abuses by Albanese, which said that she had allegedly requested payments for work done in her official capacity, something it called illegal.

U.N. Watch filed a complaint with U.N. Secretary-General Antonio Guterres and High Commissioner for Human Rights Volker Turk, demanding that Albanese be removed from her role.

In a March 2025 response, the U.N. Coordination Committee did not remove Albanese or find a formal breach, but said the proposed honorarium arrangement was “inappropriate.”

“The Committee was also satisfied by the confirmation from the Special Rapporteur that she has not and will not accept payment or honoraria of any kind for work done in her official U.N. capacity,” it said.

In 2025, Israel withdrew from the U.N. Human Rights Council (UNHRC), citing “ongoing and unrelenting institutional bias” against the Jewish state.

Israeli Foreign Minister Gideon Sa’ar, in a social media post announcing the withdrawal, cited U.S. President Donald Trump’s decision announced the previous day to pull the United States out of the council.

“Israel joins the United States and will not participate in the UNHRC,” Sa’ar wrote.

Trump announced in February 2025 that the United States would withdraw from the Human Rights Council and also would not resume funding of UNRWA, the U.N. agency that addresses Palestinians and is the largest employer in the Gaza Strip.

The United States previously froze payments to UNRWA in 2018, during Trump’s first term. They were restored under the Biden administration but stopped again after it was alleged that at least 12 agency employees participated in terrorist group Hamas’s Oct. 7, 2023, attack on Israel.

Hillel Neuer, executive director of U.N. Watch, told a House Foreign Affairs committee in January 2024 that 1,200 of UNRWA’s 13,000 Gaza employees belonged to Hamas and that 6,000 of them had family members in it.

Reuters, Dan M. Berger, and Aldgra Fredly contributed to this report.

Chinese EV companies are rapidly expanding overseas by snapping up unused factory space from struggling Western automakers, many of whom are downsizing traditional gasoline-car production, according to Nikkei.

Stellantis recently opened plants in France and Spain to partnerships with Dongfeng and Leapmotor. At the same time, Geely is expected to restart an idle production line at a Spanish factory owned by Ford Motor Company. The trend reflects a broader shift in the auto industry: Chinese EV makers are expanding aggressively while many legacy manufacturers are cutting capacity.

UBS analysts predict Chinese brands could control 35% of the global auto market by 2030, up from 25% this year, helped by China’s low-cost battery supply chain. Their report warned that foreign automakers face “structural market share loss” as competition intensifies.

Nikkei writes that building cars locally has become a practical way for Chinese companies to avoid tariffs and satisfy governments pushing for domestic manufacturing. BNP Paribas analyst James Kan said the strategy helps local economies “feel that they’re getting a cut,” making expansion politically easier.

Europe has become a key battleground. After facing steep EU tariffs, Leapmotor said it would source many components within Europe for production at Stellantis facilities. The company also plans to begin manufacturing in Brazil, where tariffs on imported EVs are set to increase again this summer.

But owning overseas factories brings new complications. Citigroup analyst Harald Hendrikse joked he was “a little amused” watching Chinese firms buy European plants because they are about to learn “how difficult it is to do business” there. Labor costs, regulations, and local sourcing rules could significantly raise expenses.

BYD has already faced setbacks abroad. After renovating a former Ford plant in Brazil, the company became embroiled in controversy over alleged “slavery-like” labor conditions tied to construction work. Even so, BYD is still exploring additional factories in Latin America and Europe.

Many Chinese automakers prefer acquiring dormant facilities instead of building new plants from scratch, which one industry executive described as requiring “tons of extra preparation work.” Companies are carefully comparing costs, efficiency, and demand before making investments.

Meanwhile, European manufacturers are struggling with underused factories. Volkswagen plans to reduce global production capacity by millions of vehicles this decade. CEO Oliver Blume acknowledged the company still has too much unused capacity in Europe, though he later said there are “currently no plans or discussions” with Chinese manufacturers.

For some executives, these partnerships could solve problems on both sides: Chinese EV makers gain faster access to foreign markets, while Western automakers find new uses for factories that would otherwise sit idle.

Authored by Steve Watson via Modernity.news,

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The world’s most critical maritime energy chokepoint has now been closed for 12 weeks, leaving seaborne energy supply chains heavily disrupted. Still, one UBS analyst points out that the shock has yet to meaningfully spill over into broader global shipping outside the Gulf area, suggesting the disruption remains largely contained for now.

“It looks like non-energy related global shipping traffic is running just 4% below normal in May – a bit better than April,” UBS analyst Arend Kapteyn wrote in a note to clients Thursday morning titled “The State Of Global Shipping Disruption.”

Kapteyn continued:

Limited signs of spillovers to non-energy shipping (so far)

In our April 30 note, we showed how global oil/gas shipping traffic had fallen by 13% from pre-Middle East conflict levels—closely matching the disruption through the Strait of Hormuz—and how the various regions were trying to reroute ships to find alternative energy supplies. Today’s chart examines whether that energy shock is spilling over into broader shipping activity. A key question is whether fuel shortages are beginning to weigh on overall trade flows, providing an additional transmission channel to global supply chains. PMI delivery times have already lengthened by around 1¾ standard deviations, but it remains unclear how much reflects product shortages versus shipping constraints.

The chart shows our “momentum” measure of global shipping traffic—defined as tonnes of cargo multiplied by nautical miles traveled per day. We’ve aggregated the daily data at a monthly frequency (May is the average of the daily data month-to-date), and standardize using z-score over the full sample. Oil and gas shipping has continued to deteriorate, now around 4 standard deviations below normal. By contrast, non-energy shipping weakened through April (-2 standard deviations) but has partially recovered in May (now around -0.7 standard deviations). In level terms, non-energy related shipping/cargo traffic fell 5% in March (vs the prior 12m average) and 13% in April but is now back to just 4% below normal. In Asia—where energy shortages appear most acute—non-energy volumes were 10% below normal in April but are now running slightly above normal. In the Gulf, however, non-energy shipping remains severely disrupted (around 83% below normal), reflecting the broader impact of the Strait of Hormuz bottleneck on both energy and non-energy flows.

Meanwhile, Maersk CEO Vincent Clerc recently warned on CNBC that a “new wake-up call” for global trade nears if the Hormuz chokepoint remains shuttered through June.

Then there was a note from UBS analyst Pierre Lafourcade last week that said, “Supply chain stress is rising at its fastest pace since the early pandemic.”

The full note can be read by Professional subscribers here at our new Marketdesk.ai portal.

Signs that energy-flow disruptions are spreading into the broader shipping complex remain limited for now, with the stress still largely contained to the Gulf region.