TRUMP CALLS IT A DEAL. IRAN CALLS IT A LIE. BOTH CANNOT BE RIGHT.

• Israel crossed the Litani River in Lebanon with ground forces from the 36th Division, with Netanyahu confirming the advance publicly on a visit to northern border troops 2TOI PM confirms troops crossed Litani, as Pentagon hosts Israeli-Lebanon security talks. This is a significant territorial escalation. The Litani has been the informal ceiling of Israeli ground operations for months. IDF Chief of Staff Lt. Gen. Eyal Zamir said the "forward defense line" in southern Lebanon "does not limit us" and that forces will act wherever "operational need" requires 2TOI PM confirms troops crossed Litani, as Pentagon hosts Israeli-Lebanon security talks. Israel also struck Beirut for the first time in three weeks and carried out heavy operations in the Bekaa Valley, killing at least 14 people 2TOI PM confirms troops crossed Litani, as Pentagon hosts Israeli-Lebanon security talks. Any Iran deal that requires a Lebanon ceasefire as a condition is now harder to sell to Tehran, which is watching Beirut get struck and Israeli forces move north of the river.

• Israel is lobbying Washington to assassinate Iran's chief negotiator Ghalibaf and resume full-scale strikes on Iranian energy infrastructure, according to sources familiar with a classified US intelligence report 11CRD Israel urging US to kill Iran’s top negotiator, resume war: Report. The report says Israeli officials are "aggressively trying to pull the US away from talks and back into war," arguing that striking oil facilities would generate enough economic devastation to trigger regime change 11CRD Israel urging US to kill Iran’s top negotiator, resume war: Report. The Mossad assessed that Foreign Minister Araghchi and Supreme Leader Mojtaba Khamenei locations are unknown, making Ghalibaf the accessible target 11CRD Israel urging US to kill Iran’s top negotiator, resume war: Report. This is a single-source report via Capital & Empire, cited by The Cradle, so apply appropriate caution to the specific operational details. But the directional claim, that Israel is actively working to derail the negotiations at the exact moment a deal appears closest, is consistent with everything we know about Netanyahu's position.

• Pakistan's deputy prime minister and foreign minister Ishaq Dar travelled to Washington to meet Secretary of State Marco Rubio, with the Iran war expected to dominate the agenda 12AJE What’s happening on Iran war day 91 as US, Iran near 60-day deal. Pakistan is the principal mediating channel between the US and Iran. The timing of this visit, the day after working-level negotiators reportedly finalised an MOU text, suggests Dar is either delivering Iranian feedback on Trump's public demands or attempting to stabilise the process after Trump's Truth Social post destabilised it.

• Iran and Oman held a "very productive" foreign minister call to discuss the future administration of the Strait of Hormuz, with Iranian FM Araghchi expressing solidarity with Oman in the face of US threats 5CRD Iran expresses ‘total solidarity’ with Oman following Trump's threats to ‘blow up’ sultanate 8PTV Iran, Oman FMs discuss administration of Hormuz Strait in ‘very productive’ call. This is the bilateral Iran-Oman coordination on Hormuz governance that Washington has been explicitly trying to prevent, and it is happening in public, the day Trump announced he was lifting the blockade unilaterally. Iran is not conceding Hormuz management. It is building a regional coalition around it.

• US inflation hit 3.8 percent in April on the Federal Reserve's preferred measure, a near three-year high, driven by the war's oil price shock 14CNN War-driven price shock sent April inflation to highest level in nearly three years | CNN Business. Americans' personal saving rate fell to 2.6 percent, the lowest since June 2022. Inflation-adjusted disposable income dropped 0.5 percent for the month 14CNN War-driven price shock sent April inflation to highest level in nearly three years | CNN Business. The economic pressure is real and building.

Oil is telling you the war is nearly over. Brent is at $92, down from $118 a month ago. The Oil Volatility Index (OVX) is at 57.84, its lowest in the data series here, and down from 76 at the end of April. Markets are pricing a Hormuz reopening with high confidence.

The problem is gold. At $4,560, gold is at its highest point in this data series, and the Gold/Oil ratio has climbed to 52.20, also a series high. That is the hedge trade saying: oil traders may be right that the deal closes, but something else could still go badly wrong. When oil falls and gold rises simultaneously, someone is buying insurance.

Defence stocks are holding firm across the board with the Defence ETF (ITA) near its series high of $235.50. Shipping stocks are soft, with tanker operator Frontline at $34.68, down from $37 last week, meaning the market believes Hormuz reopens but actual cargo flows restore slowly. VIX at 15.32 is the calmest reading in the series. Equities are not worried. The bond market is not worried. Gold is.

The April US inflation print landing at 3.8 percent matters beyond the headline number 14CNN War-driven price shock sent April inflation to highest level in nearly three years | CNN Business. Americans' savings rate at 2.6 percent means households have almost no buffer left to absorb further price increases. Inflation-adjusted spending rose just 0.1 percent in April despite nominally higher consumption, meaning people are spending more money to buy the same things 14CNN War-driven price shock sent April inflation to highest level in nearly three years | CNN Business. Fuel, energy, housing, and food accounted for roughly half of April's spending gains, which is the war's oil shock transmitting directly into household budgets 14CNN War-driven price shock sent April inflation to highest level in nearly three years | CNN Business. If the Hormuz deal collapses and oil reverses back toward $110, the Fed has no clean option: cutting rates would accelerate inflation already at a three-year high; holding would risk a recession in an economy where households are already drawing down savings to cover essentials.