OIL: Oil Summary At European Close: Crude Falls On US-Iran Optimism

Gilts are off pullback lows, with an eye on wider moves in core global FI markets.

• Little of note since this morning’s data/auction combination when it comes to UK news flow.
• Futures +12 at 91.62.
• The 20-DMA (91.81) has been breached on a couple of occasions but may be intact come the close.
• Yields 6bp lower to 7.5bp higher, notable twist steepening on the day.
• April 10 low in 10s untouched.
• Weakness in the long end lacks a clear driver, given the lack of news/technical breaks in benchmark yields/curves.
• 10- & 30-Year Tsys now outperform gilts, with the previously covered SLR reform discussions at the U.S. Tsy helping promote that move (note that spreads were already moving that way ahead of the headline).
• Outperformance vs. Bunds, at least intraday, is proving stickier.
• BoE-dated OIS continuing to show ~23bp of cuts for next month, although pricing of cuts through year-end has deepened to ~81bp vs. the ~75bp seen late yesterday.
• SONIA futures flat to +9.5, last week’s highs intact/untouched.
• UK CPI data due tomorrow, click for our full preview.

Two-way call spd interest and put structure selling since the open. Underlying futures climbing off lows, Whites lagging; projected rate hike pricing mixed vs. this morning's levels (*) as follows: May'25 at -4.4bp (-5bp), Jun'25 at -20.7bp (-20.2bp), Jul'25 at -38.9bp (-38.4bp), Sep'25 -57.4bp (-56.7bp).

• Block, +5,000 SFRM5 96.12/96.37 call spds, 3.25 ref 95.93
• -5,000 0QU5 96.62 puts, 29.0 vs 96.74/0.42%
• -5,000 3QU5 95.00 puts, 4.0 vs. 96.31/.06%
• +5,000 0QM5 95.25/3QM 95.12 put spds, 1.5 net/3QM over
• -10,000 SFRN5 96.25 calls, 24-23.5 ref 96.27
• +40,000 SFRZ5 98.00/99.00 call spds 5.0 vs. 96.52 to -.50/0.05%

Ukrainian President Volodymyr Zelenskyy has confirmed that representatives from Ukraine, the UK, France, and Turkey are holding a meeting on Black Sea security today, per Reuters. Zelenskyy also noted that talks today with US officials on a minerals agreement were "positive", adding that more meetings were expected throughout the week.

• NATO SecGen Mark Rutte said after a meeting with Zelenskyy: "We will continue to help Ukraine so it can defend today and deter future aggression, ensuring a just and lasting peace".
• The meetings come amid signs that the Trump administration may be losing patience in Russia's approach to the ceasefire process. President Donald Trump reiterated to reporters yesterday that Zelenskyy and former US President Joe Biden are responsible for allowing the war to happen but included Russian President Vladimir Putin on the list: “Biden could have stopped it, and Zelenskyy could have stopped it, and Putin should have never started it. Everybody’s to blame.”
• Trump's envoy Steve Witkoff said US-Russia talks could be on the "verge of something that would be very, very important for the world at large", but a breakthrough appears dependent on Russia’s greenlighting a truce or the US pivoting to more pressure on Moscow.
• Russian Foreign Minister Sergei Lavrov told Kommersant today: "It is not easy to agree the key components of a settlement... We are well aware of what a mutually beneficial deal looks like, which we have never rejected, and what a deal looks like that could lead us into another trap,"