THE DEAL DIDN'T HAPPEN. THE BLOCKADE DIDN'T LIFT. AND PEOPLE GOT HURT.

• The UAE secretly conducted dozens of airstrikes inside Iran, including after the April 8 ceasefire was declared, according to a Wall Street Journal report citing people familiar with the matter 5CRD UAE secretly bombed Iran dozens of times alongside Israel, US: Report10TOI UAE struck Iran dozens of times during war and amid truce, including with Israel, WSJ. Targets included the Asaluyeh petrochemical complex, the Lavan Island oil refinery, and positions on Qeshm and Abu Musa islands near Hormuz. Israel and the US provided intelligence for the strikes. Saudi Arabia privately pressured Washington to make the UAE stop, worried about attacks on regional energy infrastructure and the global economic blowback 10TOI UAE struck Iran dozens of times during war and amid truce, including with Israel, WSJ. The UAE has since shifted to a "more accommodating posture" after absorbing over 2,800 Iranian missiles and drones between February and April 5CRD UAE secretly bombed Iran dozens of times alongside Israel, US: Report. The significance here is threefold: the coalition against Iran was broader than publicly acknowledged, it included post-ceasefire strikes, and it is now fracturing along Gulf state fault lines.

• US officials suspect an Iranian soldier used a Chinese-made shoulder-fired man-portable air defense system (Manpads) to shoot down an F-15E Strike Eagle over southwestern Iran last month 2CRD US officials suspect Iran used Chinese missile to bring down F-15E warplane: Report. Intelligence sources also suggest Beijing may have supplied Iran with the YLC-8B long-range radar, designed to track stealth aircraft 2CRD US officials suspect Iran used Chinese missile to bring down F-15E warplane: Report. China's embassy called the allegations a "groundless smear." Trump had previously said Xi Jinping personally "promised" him China would not supply military hardware to Iran, and said he took Xi "at his word." Recent US intelligence assessment suggests Beijing may be planning to supply additional air defense weapons to Iran soon 2CRD US officials suspect Iran used Chinese missile to bring down F-15E warplane: Report. If confirmed, this is the most strategically significant development of the war that is not yet receiving commensurate public attention.

• Israel's ground forces have crossed Lebanon's Litani River and are encircling Nabatieh, one of the largest cities in southern Lebanon, with Israeli evacuation orders covering at least ten villages and over 1.2 million people already displaced 4AJE Israeli soldiers reach Nabatieh, one of southern Lebanon’s biggest cities. This is the second consecutive day of confirmed Litani crossings. Lebanese and Israeli military officials held direct talks at the Pentagon on Friday, with the Pentagon describing them as "productive" while declining to announce any specific outcomes 13APW Israeli troops push into southern Lebanese village amid deadly conflict. Israel and Lebanon are simultaneously fighting and talking. Hezbollah is not participating in the talks.

• Iran is preparing a "grand" state funeral for Supreme Leader Ali Khamenei, killed in the opening strikes of February 28, with a special headquarters formed to coordinate the ceremony, whose date remains undetermined 11TOI Iran preparing ‘grand’ funeral for slain leader Ali Khamenei, state TV says. Khamenei's son and successor Mojtaba has not been seen in public since taking office. The funeral planning is being read inside Iran as a signal that the regime has stabilised enough to hold a major public event, but the absence of Mojtaba from any public function for three months is a detail that has not been adequately explained.

• Vice President JD Vance appears to have quietly shifted the US goalposts on nuclear objectives, telling reporters the US could "substantially set back" Iran's nuclear programme "over the long term," rather than permanently eliminate it 14APW Vance seems to move goal posts for achieving one of Trump’s key objectives for launching the war. That is a significant step back from the war's stated objective of ensuring Iran "can never have a nuclear weapon." AP flagged this as a notable change of language. If Vance is saying the quiet part out loud, it tells you where the administration's internal thinking on the deal actually is.

Oil is still falling even as the deal has not been signed. Brent dropped to $92.05 from $93 yesterday and is down from $100 a week ago and $118 a month ago. The Oil Volatility Index (OVX) at 57.84 is continuing its steady decline from the mid-70s in April. Markets are pricing Hormuz reopening as a near-certainty regardless of the diplomatic chaos.

The Gold/Oil ratio has climbed to 52.20, a new series high. Gold itself ticked up to $4,560. That divergence, oil falling while gold keeps rising, is the market telling two stories simultaneously: energy traders think this ends soon, and macro hedgers think something else could still go wrong. Given the Chinese weapons allegations and the unsigned deal, gold's caution looks better-reasoned than oil's optimism this morning.

Defence stocks are holding firm and the Defence ETF (ITA) is near its series high. Shipping remains soft, with tanker operator Frontline at $34.68, down from $37 last week. The S&P 500 is up and VIX at 15.32 is the calmest in the series. Equities are not frightened. Whether that confidence survives a Chinese weapons confirmation or a collapsed deal is the question no one in the equity market seems to be pricing.

The Guardian's on-the-ground Iran reporting this morning is essential reading for understanding what a "deal" actually means for ordinary Iranians 8GDN A broken economy and an emboldened regime: Iranians abandoned to endure fallout from war. The picture is of an economy in worse shape than before the war began, a regime emboldened by survival, executions running at over 226 this year, and mass arrests of protesters. The regime is running weapons training booths in Tehran and broadcasting footage of children holding Kalashnikovs. For western audiences focused on Hormuz and fuel prices, the human situation inside Iran is the part of this story that has been most systematically overlooked.

On the western consumer side, the slow oil price decline since the April ceasefire has begun working its way toward pump prices, but the Guardian's analysis notes that Iran's Hormuz closure has driven US gasoline prices sharply higher and created fertiliser shortages threatening food supply chains 6GDN Looming Iran peace deal shows how Trump’s maximalist goals have shrunk. A deal that reopens Hormuz provides relief. A collapsed deal that sends Brent back toward $110 would hit households whose savings rate, as of April, was already at 2.6 percent, the lowest in four years.