AXIOMA ROOF™ SCORE HIGHLIGHTS

• US: CPI and PPI, retail sales, and industrial production data. Fed transition.
• Europe: UK politics, GDP and trade balance data. Eurozone industrial production data.
• APAC: China CPI and PPI data. Japan CPI, PPI, retail sales data, and BoJ meeting minutes. Australia’s 2026-2027 budget, consumer and business confidence data.
• Global: With negotiations at an impasse, what is the next phase of the Iran conflict? Status of the US-China relationship after the Trump-Xi meeting this week?

Summer-like volume in April suggests the outsized rally in US equities (99^th percentile for the S&P 500) was driven by a minority of optimistic investors, firmly believing in their own heads—not the place that counts most, but important nevertheless—that negotiations between the US and Iran would succeed and Hormuz would soon reopen for business as usual. Those investors were in the middle of downward dog when they saw Trump’s Truth Social post: “TOTALLY UNACCEPTABLE.”

Does it matter whether what we remember really happened? Or only that it mattered enough to be remembered?

In the current US-Iran conflict, both sides are living proof that those are not the same thing. The US carries a tabulated memory of June 2025 and 28 February 2026: facilities damaged, the nuclear timeline set back, military objectives achieved, leverage gained — and expects Iran to negotiate from that same ledger: you’re weaker now, recalculate. Iran, by contrast, has collapsed both episodes into a single emotional memory: America attacks while negotiating. Whether the 12-day war was technically mid-negotiation is irrelevant to how it is carried. What mattered enough to be remembered was the pattern, not the individual facts of each episode.

Iran is operating from a narrative memory — the kind that accumulates meaning across events. The US is operating from a factual memory — the kind that resets after each episode. In diplomacy, narrative memory almost always outlasts factual memory. You can rebuild centrifuges. You cannot unbuild the story that tells you what sort of partner you are sitting across from. Neither side is misremembering; they are remembering different things about the same events. Until that gap is acknowledged, no balance of power will deliver a durable peace.

As if an enduring oil shock were not enough, investors must now contend with a divided Fed and an awkward succession. Trump’s nominee, Kevin Warsh, takes over with the US economy still refusing to crack — industrial production, new orders, inventories, and imports still point to durable demand — while a softer labour market is being offset by inflation that is rising again. In other words, there is no easy case for rate cuts. Warsh’s choice is therefore a distinctly Trumpian one: keep policy near neutral and irritate the administration, or tighten further and invite presidential outrage. Godspeed, Mr Warsh.

Meanwhile, in the UK, in what should unnerve France’s and Germany’s centrist parties, Labour was thrashed by the right-wing populists of Reform UK in last week’s local elections. With around 30 Labour MPs, at last count, already calling for Prime Minister Starmer to go, Britain is beginning to look less like a stable parliamentary system than a replay of Australia’s revolving-door years. Between 2010 and 2018, Australia burned through Gillard, Rudd (again), Abbott, Turnbull, and Morrison: five prime ministers in eight years, four of them dispatched by their own side rather than by voters. If Starmer is pushed out in 2026, Britain’s recent sequence would read May, Johnson, Truss, Sunak, Starmer — five prime ministers in roughly eight years, with Johnson, Truss, and Sunak all leaving under duress rather than after clean electoral defeats. The arithmetic is uncomfortably close. So, increasingly, is the habit of parties mistaking internal panic for political strategy.

After April’s rebound, sentiment recovered somewhat in the US, the UK, Europe, Australia, and Japan, but remains on the back foot in Asia ex-Japan, China, and global emerging markets. Geopolitics is still binary in its potential outcomes and too unpredictable to call with any confidence. The economy, meanwhile, remains resilient — normally a virtue, as in 2023–2025 — but in the presence of rising inflation and an energy shock, that resilience only makes the monetary-policy picture harder to read. Political leadership is fiscally constrained in the US and deeply unpopular across much of Europe. And there is no shortage of catalysts ahead: the G7 summit in Evian, the NATO summit in Ankara, the USMCA renewal, and a pending Supreme Court ruling in Trump v. Cook. It takes a high tolerance for risk to hold open positions through that much uncertainty. And the US midterms are coming.