Two things happened Sunday evening that weren’t in the noon Sunday Briefing. First: WTI (West Texas Intermediate, the US oil benchmark) opened below $100 for the first time since the war began — $99.73 — pushed there by OPEC+’s June output raise and the Iran diplomatic signal. That sub-$100 print lasted less than an hour. Second: Trump posted on Truth Social announcing “Project Freedom” — a US Navy operation to begin freeing stranded civilian ships in the Strait of Hormuz starting Monday. WTI bounced to $101.34 on the announcement. The two moves together — brief sub-$100, then bounce on Project Freedom — are the market’s first real-time pricing of a potential Hormuz normalization path.
What Project Freedom actually is: the US will escort civilian ships flagged by countries not involved in the conflict out of the Hormuz chokepoint so they can resume normal operations. This is not opening Hormuz to oil exports. Iranian and sanctioned vessels are not included. The blockade on Iranian ports stays in place. But it is the most concrete US action on Hormuz since the blockade began — and it signals that the US is willing to distinguish between the military/sanctions dimension of the blockade and the humanitarian/civilian shipping dimension. That distinction is precisely what Iran’s Hormuz-first proposal was trying to create.
US equity futures are little changed — S&P +0.1%, Nasdaq +0.1%, Dow +100 points. The market is not making a directional bet tonight. KOSPI hit a fresh record Monday morning in Seoul, following South Korea’s strongest monthly gain since January 1998 in April. Japan and China remain closed for Golden Week holidays through May 6 — meaning the yen carry trade test this edition flagged for Monday actually happens Tuesday at the earliest.
WTI opened Sunday night at $99.73 — the first sub-$100 print since February 27, the day before Operation Epic Fury began. The move was the arithmetic of two weekend signals: OPEC+ raised June output targets (betting on normalization), and Iran’s Hormuz-first proposal introduced a de-escalation premium. Together they broke the $100 floor that has held since the blockade began.
Then Project Freedom arrived. Trump posted on Truth Social that the US Navy will begin escorting civilian ships flagged by non-conflict countries out of the Hormuz chokepoint starting Monday. WTI bounced immediately to $101.34. What Project Freedom is — and what it isn’t — matters enormously for how oil prices move this week. It IS: the US acknowledging that civilian shipping is being harmed and taking action to relieve that. It ISN&T: Hormuz open. Iranian-flagged or sanctioned vessels are excluded. The blockade on Iranian ports is unchanged. Oil tankers carrying Iranian crude are not part of this. The sub-$100 print showed where the market wants to go if normalization confirms. The $101.34 bounce shows how much uncertainty still exists about whether it will.
South Korea’s KOSPI hit a fresh record Monday morning, extending April’s +31% gain — the index’s strongest monthly performance since January 1998. The move reflects semiconductor strength (SK Hynix and Samsung leading) and the AI infrastructure supercycle that drove the Seagate and SanDisk prints this week. Hang Seng futures are up 0.84% at 25,992. Australia’s ASX 200 is marginally lower. Japan and China remain closed for Golden Week. The yen carry trade test — the first real test of whether Thursday’s intervention holds against the rate differential — is pushed to Tuesday when Tokyo reopens.
ISM Services PMI (10AM) covers the services sector — roughly 70% of the US economy that Manufacturing PMI doesn’t capture. March read was 54.0, prices paid surging. JOLTS job openings (also 10AM) gives the first full-blockade reading on labor demand. If job openings fall sharply, the war is hitting hiring. If they hold, the labor market is resilient. Both print simultaneously Tuesday morning. Japan reopens Wednesday — the carry trade gets its full-liquidity test. Next FOMC: June 16-17 (Warsh’s first). Senate on recess this week.
Nonfarm payrolls covering the full blockade period — when WTI ran from $88 to $107. Jobless claims at 189,000 last week (lowest since September 2022) suggest labor held. ISM Manufacturing employment in contraction for four straight months suggests factories did not hire. Sub-200K: soft-landing confirmed, equity positive. Above 220K: stagflation picture deepens. Unemployment rate above 4.2% or wages above 4% are the secondary signals to watch.