(The opinions expressed here are those of the authors.)

By Mike Dolan

May 22 (Reuters) - Everything the ROI team are reading,

watching and listening to over the weekend.

From Mike Dolan, Editor-at-Large, Markets & Finance

Hello Morning Bid readers!

This week kicked off with a fresh surge in sovereign bond yields

around the world as the Iran energy shock kept up the pressure

on oil prices, inflation expectations and rate-hike bets. Global

equities were volatile against that backdrop as the risk-off

turn took some attention away from the AI frenzy, though major

indexes ticked up later in the week, led by buoyant chipmakers.

Government borrowing costs notched several milestones as bonds

came under renewed pressure this week, with 30-year U.S.

Treasury yields hitting their highest point since 2007. Japan's

long-dated borrowing costs also hit new record highs and

Britain's gilt yields hit their highest since the 1990s as

investors fretted about a possible change in Prime Minister. The

bond selling abated late in the week, with gilts catching a

break from below-forecast UK inflation and signals from the main

challenger to Keir Starmer's premiership, Manchester mayor Andy

Burnham, that he would stick to the government's existing fiscal

rules.

But the situation in the Gulf remained the major aggravator of

bond yields as the energy shock showed no sign of abating. Oil

prices were volatile throughout the week, with fresh attacks in

the region over the weekend pushing Brent crude back over $110

per barrel on Monday. Prices later dipped as low as $105/bbl on

Wednesday after reports that supertankers carrying some 6

million barrels had transited the Strait of Hormuz.

Meantime, President Trump continued his hardball strategy:

floating fresh military action while urging Tehran to strike a

peace deal, all while talking up prospects for a breakthrough.

Oil prices spiked once more on Thursday, however, after Tehran

appeared to harden its stance on its nuclear programme,

underscoring the distance that remains between the two sides'

negotiating positions.

The clock is ticking for energy markets. Experts including IEA

chief Fatih Birol warned this week of a looming crunch point, as

the world's crude inventories threaten to hit critically low

levels in the near future if the Strait of Hormuz stays

effectively shut. That could mean the global market is only

months away from a breaking point.

While any let-up in oil prices could relieve pressure in the

bond market, the summer months could be a real crunch in

disrupted fuel supplies.

Indeed, the past week's ructions could be a foreshadowing of

what's in store for markets now that - under the new leadership

of Kevin Warsh - they can no longer assume that the Federal

Reserve will always step in to buy bonds in a pinch.

Warsh is taking over the helm at a difficult moment. Set to

be sworn in at the White House later today, Warsh has been

expected to seek rate cuts once in his post, in keeping with the

president's long-stated wishes. But that might not be possible

given the inflation backdrop.

Curiously enough, though, President Trump seemed to step

back this week from his call for immediate rate cuts. In remarks

made to the Washington Examiner, he told the paper he would let

Warsh "do what he wants to do" on rates.

Is that an acknowledgement that rates simply cannot come down as

price pressures compound? Perhaps, and Fed policymakers

increasingly seem to agree. Minutes from its April policy

meeting, released on Wednesday, gave more colour around the

hawkish dissents in last month's statement.

Given that accelerating inflation has pushed real interest rates

into negative territory both in the U.S. and elsewhere,

policymakers may soon be forced to raise rates - whether they

want to or not.

In company news, this week brought one of the most hotly awaited

events of the earnings season as chip giant Nvidia ( NVDA ) reported

first-quarter results. It produced a strong beat, though the

share price response was muted. That's a sign of how much

optimism is already in the price and how high the bar is for the

world's most valuable company to continue wowing markets - a bar

that threatens to rise further as bond yields soar.

Elsewhere in the AI value chain, a planned strike by Samsung

workers dragged down the tech giant's shares on Wednesday,

though the South Korean chipmaker surged 8.5% to a record

high on Thursday - pulling the broader KOSPI index up with it

- after an 11th-hour deal averted the strike.

There's more excitement to come where tech is concerned as Elon

Musk's SpaceX filed on Wednesday for its long-awaited IPO, which

could be the largest in history. It could list its shares as

early as June 12 on the Nasdaq, according to Reuters sources.

There were also reports that OpenAI plans to file for an IPO

shortly, with a possible listing date in early September and AI

rival Anthropic is also expected to hit the Street.

For more data-driven insights on markets and commodities,

check out Reuters Open Interest. You can learn:

Why might AI push up the neutral interest rate?

How could the new status quo in the Gulf threaten the dominance

of the U.S. dollar?

How can Australia's LNG sector be both uninvestable and the

country's greatest opportunity for growth?

What's up with surprisingly strong zinc?

Which nations are most vulnerable to the diesel price squeeze?

Why might China bulls need to tread carefully?

What are three key reasons why the equity rally keeps going?

I'd love to hear from you, so please reach out to me at

[email protected].

This weekend, we're reading...

RON BOUSSO, ROI Energy Columnist: In his Substack Noahpinion,

economics columnist Noah Smith argues that militaries without

drones are obsolete in modern warfare, warning that drones

produced in a single day could destroy a year's worth of tank

output from Rheinmetall. Scary stuff.

GAVIN MAGUIRE, ROI Global Energy Transition Columnist: A report

from the International Renewable Energy Agency on decarbonizing

heavy road transport shows that heavy trucks, long seen as

permanently reliant on diesel because of the high cost and

weight of batteries, are becoming increasingly viable for

electrification. Things are changing, and fast.

CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist: Former

Reuters columnist John Kemp's slide deck offers a comprehensive

but clear look at the impact of the effective closure of the

Strait of Hormuz on global oil markets, with detailed analysis

of both flows and prices.

We're listening to...

RON BOUSSO, ROI Energy Columnist: This Oxford Institute for

Energy Studies podcast analyzes the volatile and often

unexpected response of oil prices to the Hormuz crisis.

And we're watching...

JAMIE MCGEEVER, ROI Markets Columnist: In March, leading oil

analysts Amrita Sen of Energy Aspects and Jeff Currie of Carlyle

discussed the energy shock from the then-three-week-old Iran

war. Two months on, with the Strait of Hormuz still closed, they

reconvene - and remain bearish. If markets are in "la la land,"

as Currie says, why is oil near $100, not $200?

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Opinions expressed are those of the authors. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.