On this day: in 1997, The Bank of England is given independence from political control, the most significant change in the bank’s 300-year history..

QOTD: “The US will end its military campaign and lift its blockade of Hormuz “assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption,” US President Donald Trump posted on social media on Wednesday, without giving details of the proposal. “If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before.”

CHINA/IRAN/RUSSIA/MIL/TECH – China Is Still Supplying Drone Factories in Iran, Russia Despite U.S. Sanctions
https://www.wsj.com/world/china-is-still-supplying-drone-factories-in-iran-russia-despite-u-s-sanctions-1e6820ca?mod=world_lead_pos2

On March 5, as the U.S. and Israeli militaries hammered Iranian targets and Tehran launched attacks at Tel Aviv and Gulf countries that host American bases, an email blast emanated from a server located in China.

“We are deeply shocked and outraged by the aggression against Iran, and our hearts are with you,” read the message from Xiamen Victory Technology. The company offered to sell German-designed engines used to power one-way attack drones.

The U.S. has prohibited the sale of those engines, known as the Limbach L550, to Iran and Russia. It has been an important component in Iran’s Shahed-136 exploding drone, a version of which Russia has also been using extensively in Ukraine. Victory Technology featured an image of a Shahed-style drone on its website’s product page, alongside the slogan “Innovating Aviation Engine Solutions.”

The open wartime marketing by a small, obscure Chinese company points to a growing source of frustration for Washington: its struggle to staunch the flow of so-called dual-use goods—items with both civilian and military uses—to adversaries.

Chinese companies are shipping hundreds of containers filled with such goods to Russia and Iran, according to Chinese customs data. Items on the packing lists range from engines to computer chips, fiber-optic cables and gyroscopes. For a time, Chinese exporters intentionally mislabeled some shipments to skirt U.S. and European sanctions, but in many instances they no longer bother, according to former senior Treasury Department officials and weapons analysts.

The expanding trade marks one of the biggest challenges for American nonproliferation officials in the era of drone warfare. During the Cold War and for decades afterward, they focused intensely on nuclear weapons and ballistic missiles—high-tech instruments of mass destruction with rare components that were relatively straightforward to trace. Low-tech and disposable, drones are made almost entirely of common parts that easily enter and exit the swirl of global trade undetected.

IRAN/US/ISRAEL/CHINA/MIL/ANOTHER DAY, ANOTHER VARIATION OF THIS HEADLINE – Iran Evaluating US Proposal to End War as China Calls for Peace
https://www.bloomberg.com/news/articles/2026-05-06/us-boosts-efforts-to-end-iran-war-as-trump-suspends-hormuz-plan?srnd=homepage-americas

Iran is evaluating a new proposal from the US to end their near 10-week war, according to a person familiar with the matter, as China added its voice to global pressure to wrap up the conflict.

Washington’s one-page memorandum of understanding will, if Iran accepts it, lead to the gradual reopening of the Strait of Hormuz and lifting of the American blockade on Iranian ports, according to the person, who asked not to be identified discussing sensitive information. Nothing has yet been agreed, the person said, and detailed negotiations on Iran’s nuclear program will come later in the process.

Oil prices plunged on the news, while global stocks and bonds rallied.

The plan includes provisions for the removal of sanctions on Iran and a moratorium on the country’s uranium enrichment program, the person said. All conditions can be reversed if a wider nuclear deal can’t be reached, they said.

Tehran is expected to send a response via mediator Pakistan in the next two days, the person said. Axios first reported on the proposal.

FRANCE/IRAN/SHIPPING – French container ship attacked in Strait of Hormuz
https://www.politico.eu/article/eu-france-container-ship-attacked-strait-of-hormuz/

A French container ship was struck in the Strait of Hormuz, injuring several crew members, amid U.S. President Donald Trump’s on-and-off guarantee of escorting commercial vessels through the critical waterway.

French shipping giant CMA CGM confirmed to POLITICO that its vessel, the San Antonio, was targeted, as a ceasefire between the United States and Iran has frayed in recent days.

“The CMA CGM Group confirms that one of its vessels … was the target of an attack yesterday while transiting the Strait of Hormuz, resulting in injuries among crew members and damage to the vessel,” the company said in a statement, adding that injured seafarers have been evacuated and are receiving medical care.

The vessel switched off its tracking signal before entering the strait, leaving the exact location of the strike unclear.

The incident follows Trump’s announcement that the U.S. would guide ships safely through Hormuz under “Project Freedom,” a plan to escort vessels out of the critical waterway. On Tuesday night, however, he said the U.S. would pause support for ships transiting the strait “for a short time,” citing “great progress” in negotiations with Iran.

French government spokesperson Maud Bregeon said: “The strikes that targeted a CMA CGM vessel clearly show that the situation remains dangerous. The ship was not flying the French flag. As things stand, France was therefore in no way targeted. Both the Iranians and the Americans must understand that it is in the common interest for traffic to resume freely.”

MORE: France Says Maritime Group Ready to Escort Ships in Hormuz
https://www.bloomberg.com/news/articles/2026-05-06/france-says-maritime-coalition-ready-to-escort-tankers-in-hormuz?srnd=phx-politics

A maritime coalition led by France and the UK is ready to escort tankers through the Strait of Hormuz if Iran agrees to a US proposal to end the war, according to a French official.

France has moved its Charles de Gaulle aircraft carrier to the Red Sea where it will soon be met by vessels from other partner countries, the official told reporters on Wednesday, insisting that the move was meant to signal that the coalition stood ready to secure the strait.

French President Emmanuel Macron has spoken to US counterpart Donald Trump and Iranian President Masoud Pezeshkian, and France maintains its position that it is not a party to the war, the official in Macron’s office added, speaking on condition of anonymity to comply with government rules.

The move comes as Iran weighs a new proposal from the US to end the war, which has been going on for nearly 10 weeks. The offer would lead to the gradual reopening of the Strait of Hormuz and the lifting of the American blockade on Iranian ports.

SWITZERLAND/CRUISE FROM HELL/LONG-TIME SUBSCRIBERS WILL KNOW THAT THAT IS A REDUNDANT STATEMENT IN MY WORLD – Hantavirus Case in Switzerland Spurs Race to Trace Contacts
https://www.wsj.com/world/asia/hantavirus-case-in-switzerland-spurs-race-to-trace-contacts-60f21548

Swiss officials are rushing to trace the contacts of a man who has been hospitalized in Zurich with a strain of the hantavirus that is capable of human-to-human transmission.

The patient became ill in Switzerland after returning from a trip to South America with his wife at the end of April, Switzerland’s Health Ministry said Wednesday. The man had traveled on the cruise ship where several cases of hantavirus, a disease typically carried by rodents, have killed at least three people, the ministry added.

The new case—in which a patient fell ill after his return to the mainland—raises the specter of human-to-human transmission outside the Dutch-flagged MV Hondius cruise ship, which is currently anchored near Cape Verde.

Swiss officials said they are investigating whether the Zurich patient came into contact with other people during his infectious period. The U.S. Centers for Disease Control and Prevention says symptoms of a hantavirus infection usually take one to two weeks to emerge, but in some cases can take as long as eight weeks.

Viruses in the hantavirus family usually spread to humans through contact with infected rodent urine, droppings or saliva. But one strain of the virus found primarily in Chile and Argentina, known as the Andes virus, has shown limited evidence of human-to-human transmission. The World Health Organization said Tuesday that it is possible that there was human-to-human transmission aboard the MV Hondius.

The new hantavirus case emerged when the Zurich patient started to feel ill after his South American trip and phoned his physician. He then went to a hospital, where he tested positive for the Andes virus. The patient’s wife hasn’t shown symptoms but is “self-isolating as a precaution,” the Swiss Health Ministry said.

RUSSIA/UKRAINE/MIL – Russia snubs Ukraine’s unilateral ceasefire, firing dozens of drones
https://apnews.com/article/russia-ukraine-war-ceasefire-drones-missiles-crimea-484f28530eb0c2ce64fff9be5eb7c9d3

Russia fired dozens of drones at Ukraine in nighttime attacks, Ukrainian officials said Wednesday, disregarding a unilateral ceasefire announced by Kyiv that began at midnight.

The Russian Defense Ministry claimed that Ukraine hadn’t abided by its own ceasefire, saying that air defenses shot down 53 Ukrainian drones over Russian regions, the illegally annexed Crimean Peninsula and the Black Sea between Tuesday evening and dawn Wednesday.

Five people were killed by a Ukrainian drone strike on the city of Dzhankoi in Crimea, according to Russia-installed Gov. Sergei Aksyonov. He reported the casualties just after midnight, but posted about the attack itself more than 90 minutes earlier.

There had been no official sign from Moscow that it would heed Kyiv’s ceasefire, and there was little hope for a pause in hostilities as the war stretches into its fifth year following Russia’s all-out invasion of its neighbor. U.S.-led diplomatic efforts to stop the war over the past year have come to nothing.

JAPAN/US/AUSTRALIA/CHINA/PHILIPPINES/MIL – Japan fires missile in joint drill with US and allies in northern Philippines, facing South China Sea
https://www.reuters.com/business/aerospace-defense/japan-fires-missile-joint-drill-with-us-allies-northern-philippines-facing-south-2026-05-06/

Japan’s Self-Defense Forces fired a Type 88 anti‑ship missile during a ‌joint maritime exercise with U.S., Australian, and Philippine forces on Wednesday, hitting a decommissioned Philippine Navy ship in waters facing the South China Sea.

The drill took place as Manila and Tokyo began talks on a potential defence equipment transfer, made possible by ​Japan’s decision to scrap restrictions on military exports.

Discussions include the possible early transfer of Abukuma class destroyers ​and TC-90 aircraft to the Armed Forces of the Philippines, Japan’s Defense Minister Shinjiro ⁠Koizumi said.

Philippine Defense Secretary Gilberto Teodoro and Koizumi witnessed the live missile firing on the ground, while Philippine ​President Ferdinand Marcos Jr. watched the exercise from military headquarters in Manila via a live video feed, the ​president’s office said.

“The exercise showcased coordinated maritime strike operations among allied forces and highlighted the AFP’s growing capability to operate alongside international partners in promoting regional security and freedom of navigation,” it said in a statement.

ARMENIA/EU/RUSSIA – Armenia hosts a historic European Union summit as the country charts a course away from Russia
https://apnews.com/article/armenia-russia-eu-summit-be0ff15ba34ab0d3316e00856a84d487

Armenia hosts its first bilateral summit with the European Union on Tuesday, a landmark diplomatic moment for the Caucasus Mountains nation that has formally declared its ambition to join the bloc and is cautiously loosening its ties with longtime ally Russia.

The EU-Armenia summit in Yerevan follows the eighth gathering of the European Political Community, or EPC, which brought dozens of European leaders to the Armenian capital on Monday to address European defense issues and the Iran war.

Meanwhile, Tuesday’s bilateral meeting saw Armenia and the EU sign a connectivity partnership to strengthen economic ties and deepen security cooperation.

The two events underscore how Armenia is seeking to turn westward and shed Russia’s influence. Armenia’s relations with Moscow, its longtime sponsor and ally, have grown increasingly strained since 2023, when neighboring Azerbaijan fully reclaimed the Karabakh region and ended the decadeslong rule by ethnic Armenian separatists.

ROMANIA/POL – Romanian socialists and far right topple government
https://www.politico.eu/article/romania-government-collapses/

Romania’s centrist government collapsed on Tuesday, throwing one of Europe’s most strategically important countries into turmoil at a critical time.

Center-right Prime Minister Ilie Bolojan, who heads the National Liberal Party, lost a confidence vote in the country’s parliament after only 10 months in office, bringing his short-lived and unpopular attempt to rein in the country’s budget deficit to an abrupt end.

The European Union’s sixth most populous country — and a key NATO member bordering Ukraine — now faces an uncertain future as it seeks to stave off the threat of an economic crisis in the months ahead.

Moderate centrist President Nicușor Dan is now expected to hold consultations with party leaders in an attempt to broker an agreement for a new coalition to take over running the country.

Bolojan’s defeat was in part masterminded by far right leader George Simion, who promised “an end to ten months during which the so-called pro-Europeans have delivered nothing but taxes, war and poverty.”

But Simion’s bid to oust the prime minister only succeeded because his far right Alliance for the Union of Romanians joined forces with the center-left Social Democratic Party (PSD), which quit Bolojan’s coalition government last month.

GERMANY/MIL/US – German defense minister laments long-range strike ‘gap’ caused by planned US drawdown
https://www.defensenews.com/global/europe/2026/05/05/german-defense-minister-laments-long-range-strike-gap-caused-by-planned-us-drawdown/

Germany’s ambitions to close a long-range strike capability gap are facing a fresh setback after the Trump administration moved to withdraw thousands of U.S. troops from German soil and effectively shelved a Biden-era plan to temporarily deploy Tomahawk cruise missiles and SM-6 missiles there.

Defense Minister Boris Pistorius, speaking Monday in Munster, Germany, after a major Bundeswehr combined-arms exercise, said the reported decision meant Germany would be left with a capability gap.

“That was an agreement between Joe Biden and Chancellor Olaf Scholz at the time − as a temporary bridge, until we as Europeans had developed our own systems,” Pistorius told reporters, referring to the former U.S. and German leaders “That this may now not happen in the way we had assumed tears this capability gap open again. We have to look at how we can compensate for that.”

“There are ideas, but no solution yet,” said the defense minister.

The Biden administration announced in July 2024 that it would temporarily station a Multi-Domain Task Force in Germany equipped with the Typhon ground-launched system, which can fire Tomahawk cruise missiles and SM-6 interceptors, in what officials described as a bridging measure ahead of European alternatives coming online.

ISRAEL/UAE – Netanyahu Holds Rare Call With UAE President as Defense Ties Deepen
https://www.bloomberg.com/news/articles/2026-05-06/netanyahu-holds-rare-call-with-uae-s-mbz-as-defense-ties-deepen?srnd=phx-politics

The president of the United Arab Emirates, Sheikh Mohammed bin Zayed, and Israel’s Prime Minister Benjamin Netanyahu held a rare phone call this week, underscoring their countries’ deepening relations in the wake of the Iran war.

Netanyahu was among the leaders who called the UAE president, known as MBZ, following Iran’s attacks on the UAE on Monday, according to WAM, the Arab country’s state news agency. He expressed solidarity with the UAE and “support for all measures it takes to safeguard its security,” WAM said on Wednesday.

The UAE is one of only a few Arab countries to formally recognize Israel, having signed the Abraham Accords in 2020. Yet this is the first call between MBZ and Netanyahu that WAM’s announced since early 2023.

Despite the US-backed accords, there were tensions for years, in large part because the UAE was frustrated with Israel for refusing to work toward Palestinian statehood. Those strains worsened when Netanyahu formed the Jewish state’s most right-wing government in history in late 2022, and by the war in Gaza triggered by Hamas’ attack on Israel in October 2023.

ARGENTINA/HAPPY FOR A B-, I GUESS? – Fitch Upgrades Argentina to B- With Stable Outlook
https://www.wsj.com/world/americas/fitch-upgrades-argentina-to-b-with-stable-outlook-46fe0e4f?mod=world_feat3_americas_pos1

Fitch Ratings said it was upgrading its rating on Argentina following the October elections that saw President Javier Milei emerge with a stronger popular mandate.

Fitch said Tuesday it upgraded the country’s Long-Term Foreign Currency and Local Currency Issuer Default Rating to B- from CCC+, with a stable ratings outlook.

The rating reflects Argentina’s structurally improved fiscal and external balances, progress on economic reforms, and improved prospects for FX reserve accumulation, Fitch said. In addition, Fitch expects the government will secure adequate financing to cover debt obligations.

Fitch also noted Argentina’s foreign currency debt service has stepped up and will rise further in 2027 ahead of elections. Inflation in the country also rose to 3.4% in March, according to Fitch.

The B- rating is constrained by a number of factors, including Argentina’s international liquidity position, as well as high inflation and a record of macroeconomic instability, Fitch said.