Luke Vargas (2:39)

Separately, the US Yesterday seized an Iranian ship that had attempted to get past its blockade of the Strait of Hormuz. The ship, which was previously sanctioned by the US and has frequently visited Chinese ports, was intercepted by an American destroyer after ignoring US Demands that it stop. Motor vessel Tosca. Motor vessel Tosca, vacate your engine room. Vacate your engine room. We're prepared to subject you to disabling fire. China's Foreign Ministry didn't immediately respond to a request for comment. Wary of the potential long term economic consequences of the war, the United Arab Emirates has asked the US about offering it a financial lifeline. We exclusively report that could include a currency swap line which would give the Emirates Central bank cheap access to dollars in order to prop up its currency or shore up its foreign reserves. Emirati haven't made a formal request yet, but we report that they have argued it was President Trump's idea to attack Iran and that should they run out of dollars, the country could be forced to use the Chinese yuan for oil sales, an implicit threat to the US Dollar, which enjoys near exclusive use in oil transactions. The UAE Central bank didn't respond to requests for comment and a Fed spokesperson declined to comment. Meanwhile, with the world's focus on Iran, North Korea has accelerated work on its nuclear weapons program. Are k Bureau chief Tim Martin is in Seoul. Tim, what's the news here? What have we missed?

Tim Martin (4:09)

North Korea's been very busy. They've come near completion of a new facility at its main Yongbyon nuclear site. There's more activity from a 5 megawatt reactor, a reprocessing unit, a light water reactor. They're conducting missile tests left and right. They just did one over the weekend with cluster munitions. This is Kim Jong Un exploiting the moment. He has a nuclear bomb he's perceives to be under no threat of a regime overthrow. And the US Is not threatening to invade North Korea. In fact, President Trump has often spoken of his close relationship with Kim Jong Un. And Moscow and Beijing have given all types of political, economic and military protection to Pyongyang.

Luke Vargas (4:50)

Tim, would it be fair to say that whereas maybe Iran is still in a vulnerable pre nuclear phase, North Korea is looking like it's basically crossed a threshold here and is now commanding respect from world powers?

Tim Martin (5:01)

I think that's what world events show. Iran, on the precipice of a nuclear program has made it a target by the Trump administration. We can look at Venezuela, Cuba, other countries that have nothing amounting to a nuclear program, but have also made them vulnerable to intimidation and tactics. There are certainly international agencies that still raise alarm about North Korea's nuclear advances. In fact, Rafael Grossi, the UN's International Atomic Energy Agency chief, recently said, all this activity points to very serious increase in their capabilities. But what's the ability to stop, thwart, convince North Korea not to go down this nuclear pathway that has more or less been eliminated. The main historical mechanism to do this would have been at the United Nations. However, Russia and China have veto powers to any type of deepening or tightening of sanctions.

Luke Vargas (5:53)

That was our Korea bureau chief, Tim Martin. And Japan is for the first time ever going to export its warships. Shares in Mitsubishi Heavy Industries are up more than 3% today after the company finalized a deal to supply frigates to the Royal Australian Navy. The more than $7 billion agreement comes as Japan prepares to loosen restrictions on exporting lethal weapons amid growing global demand for munitions and military equipment. And with oil prices now rallying again on concerns that the Iran war could drag out, the specter of rising inflation is back. Investors hunting for clues on the war's effect on the US Economy will have a lot to consider this week, starting with a retail sales update tomorrow that'll feel whether consumer spending has slowed as a result of rising prices. PMI readings for April, due on Thursday, will show the hit to the manufacturing and services sectors. And on Friday, it's the closely watched Consumer sentiment report from the University of Michigan. And amidst it all, the Trump administration is hoping to push through Kevin Warsh's nomination for Fed chair, with his Senate confirmation due to begin tomorrow. But as Telus Demos explained on WSJ's take on the Week podcast, that might not be so straightforward if Jerome Powell

Telus Demos (7:08)

doesn't leave the Fed when his term ends, which is in the middle of May. There's kind of a race to officially confirm Warsh ahead of that. But there's this ongoing sort of issue with Senator Tillis, who's put a hold on the nomination until the Department of Justice drops its investigation of Jerome Powell. So a lot of drama about how quickly will Warsh's nomination actually move. And that's all before, like the substantive drama around Kevin Warsh, which is that he has argued that we can and should be cutting interest rates. And it's becoming harder arguably to make the case that we should be cutting rates in the face of the risk of an oil price shock, but also a really tough to read labor market.

Luke Vargas (7:56)

Coming up, a pair of new drugs targeting a genetic driver of lung cancer show strong trial results. And Blue Origin misses the mark on an attempted satellite launch. Those stories after the break.

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Luke Vargas (8:43)

we're exclusively reporting that Eli Lilly is in advanced talks to acquire Colonia Therapeutics for more than $2 billion, with a deal coming as soon as today if talks don't fall apart. Boston based Colonia is developing a next generation treatment for the blood cancer multiple myeloma. And buying the privately held company could help Eli Lilly to boost its position in the lucrative blood canc cancer segment of a global cancer drug market worth almost a quarter trillion dollars. Meanwhile, Journal News associate Xavier Martinez says that doctors may be getting closer to having a potent weapon against a genetic driver of lung cancer that's long lacked any targeted treatment options.

Xavier Martinez (9:22)

Scientists have spent decades trying to crack a genetic mutation called kras. It drives some of the deadliest cancers, including lung cancer. But it is so hard to target that researchers named it the Death Star. This weekend at a major cancer conference in San Diego, researchers presented early results from two experimental drugs that their enthusiastic could work against it. In one study, a drug called Zoldan Rasib shrank lung cancer tumors in more than half of patients with a variant of the mutation that has never had a targeted treatment. In the other study, a drug called Elis Rasib shrank lung cancer tumors in nearly 60% of patients, roughly double the rate seen with existing approved drugs. It's still early. These are small trials and preliminary data, but doctors are saying that it could be a breakthrough for patients who have had very few options. That could be a very big deal.

Luke Vargas (10:14)

And finally, it's time to put on my ear protectors, because Blue Origin yesterday celebrated the company's first commercial launch for its massive new Glenn rocket. The reusable rocket even nailed its landing.

Capital Group Host (10:29)

Welcome back. Once again, never tell me the odds. It's good to say that, but a

Luke Vargas (10:33)

satellite it was carrying wasn't deployed correctly, with Blue Origin saying in a social media post that the satellite, owned by AST Space Mobile, was deployed into an incorrect orbit. AST Space Mobile is building a cellular broadband network in space, but said the satellite's altitude was too low to sustain operations and that it will be taken out of orbit. The stumble comes as Jeff Bezos. Blue Origin works to ramp flights to address a backlog and better challenge Elon Musk's SpaceX, which has a dominant position in the launch market. And that's it for what's news for this Monday morning. Today's show was produced by Daniel Bock and Hattie Moyer. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show, and until then, thanks for listening.

Capital Group Host (11:29)

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