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Highlights
The London Stock Exchange opened the week on a stronger note, with the ftse 100 and ftse 350 indices posting early gains. Market momentum came ahead of a string of central bank decisions from the US Federal Reserve, Bank of Japan, and Bank of England, with expectations leaning towards policy rate holds.
At the same time, investors closely followed developments from the Middle East, where ongoing conflict between Israel and Iran continued to rattle global markets. Currencies and commodities also reflected cautious positioning, as traders balanced regional instability against expected macroeconomic updates throughout the week.
Middle East Tensions Highlight Oil Supply Risks
The escalation in military activity between Israel and Iran extended into a third day, with missile strikes reported in Tel Aviv and surrounding areas. US diplomatic sites were affected, with the American embassy in Tel Aviv sustaining minor damage. While no injuries were reported, authorities issued a “shelter in place” directive for US diplomatic staff in Jerusalem.
The broader implications for oil supply remained top of mind, with market participants monitoring developments near the Strait of Hormuz. As a critical conduit for global oil transportation, the region’s stability is seen as central to maintaining steady energy flows. Oil futures showed early price firmness as energy traders assessed the risks of extended conflict and logistical disruption.
Central Banks Take Centre Stage in Macroeconomic Calendar
Attention turned to upcoming policy meetings from major global central banks. The US Federal Reserve is scheduled to meet on Tuesday, followed by the Bank of Japan and Bank of England across the week. Market expectations broadly point to a status quo in interest rates, although recent commentary has highlighted concern around the UK’s fiscal outlook and its effect on long-term borrowing dynamics.
The pound and euro exhibited modest fluctuations in early trading, with traders adopting a wait-and-see approach. Currency and bond markets are expected to react sharply to any deviations from forward guidance provided in the post-meeting commentary.
UK Equities See Movement on Company Developments
Within the ftse 100, gaming and entertainment group Entain (LON:ENT) moved higher following its upward revision of full-year revenue expectations for its BetMGM unit. Mining group Glencore (LON:GLEN) also gained, confirming the progression of its transaction to sell its stake in Viterra to Bunge.
In the ftse 350, Assura (LON:AGR) confirmed it is reviewing new terms presented by Primary Health Properties (LON:PHP) in their ongoing takeover discussions. PHP’s stock saw modest movement as investors awaited further updates on the proposed merger.
Costain Group (LON:COST), listed on the FTSE AIM UK 50 INDEX, advanced on the back of a planned buyback program. The company confirmed that trading remains aligned with expectations for the year, providing clarity amid broader market uncertainty.
European and Asian Markets Mixed as Wall Street Trends Lower
Across continental Europe, benchmark indices in Paris and Frankfurt opened in positive territory, mirroring London’s early momentum. In Asia, Japan’s Nikkei index advanced, while China’s Shanghai Composite and Hong Kong’s Hang Seng posted more moderate gains.
The US dollar firmed slightly against the yen, while gold prices edged lower after recent strength. Meanwhile, US Treasury yields continued to inch higher, reflecting investor recalibrations ahead of the Fed’s next steps.
Economic Indicators and Market Reactions Awaited
Later in the day, market focus is expected to turn toward the release of the New York State manufacturing index, offering insights into US regional economic activity. With central bank communications expected throughout the week, global indices, including the ftse, are poised for heightened attention from traders and policymakers alike.
