HL commentary as it happens

Oil rises for third session in a row

Oil prices extended gains for a third straight session as Ukrainian strikes on Russian infrastructure sparked renewed supply concerns. The EU is reportedly weighing sanctions on firms in India and China facilitating Russian oil flows, while President Trump signalled readiness for major sanctions if Europe follows suit. Tensions in the Middle East and expectations of a Fed rate cut are also supporting bullish sentiment.

Gold notches fresh record high

Gold has reached yet another record high as a weaker dollar and growing conviction around Fed rate cuts fuel demand for real assets. With inflation still simmering and central banks pivoting toward easing, investors are increasingly faced with a simple choice: ride the wave of asset inflation or stick with cash and risk being left behind.

US markets rise into key Fed meeting

US equities held firm ahead of Wednesday’s Fed meeting, with both the S&P 500 and Nasdaq closing at fresh highs despite a muted session. A 25bp rate cut is fully priced in, but investor focus will be squarely on the Fed’s forward guidance, particularly the dot plot and Powell’s tone, which could shape expectations for the pace of easing.

UK labour market cools but wage growth sticky

Signs of cooling are emerging in the UK labour market, but wage growth remains stubbornly high, still well above levels consistent with the Bank of England’s inflation target. The slight dip in pay growth and falling payrolls suggest momentum is easing, yet services inflation remains sticky, keeping rate cut hopes firmly on ice. With UK rates likely on hold as we move into 2026, markets may need to recalibrate expectations around the timing and pace of policy easing.

London stocks flat at the open

London stocks opened in a holding pattern, with investors scanning the horizon for a catalyst as central bank decisions loom large. With the Fed expected to cut and the Bank of England likely to stay put, traders are watching for cues that could shift sentiment. Meanwhile, UK-US tech and AI talks are drawing attention, as American giants pledge billions to support Britain’s ambitions in the sector - planting the early seeds for much-needed economic growth.

Energy security in focus as Brent Crude rises above $67 a barrel

The need to build up energy security is partly behind the big drive into nuclear around the world, as well as looming net zero targets. It’s come into sharp focus following Russia’s invasion of Ukraine, and the reduction of the reliance on its energy sector.

Moscow’s actions are still causing a stir on energy markets, with oil prices creeping higher after it intensified attacks on Ukraine. It’s prompted renewed calls by President Trump for the EU to impose tariffs on China and India, big buyers of Russian oil. It’s part of attempts to put a bigger chokehold on Russia’s sales, put a dent in its war chest and push Moscow towards the negotiating table.

Fed prepares to cut interest rates

The Fed is expected to cut interest rates on Wednesday. Even though inflation is still sticky in the US, the darkening outlook for the jobs market indicates more disinflationary pressures are brewing. As further cuts are forecast, it’s been keeping optimism alive on equity markets, with stocks on Wall Street set for a further rebound.

FTSE 100 sees a flat start to trading

There’s a 'wait and see mood' at the start of the week as investors eye key central bank meetings and assess the potential path of interest rate cuts. Warnings about higher food prices coming in the UK are likely to cause fresh worries about how long borrowers will have to wait until Bank of England policymakers vote for another cut. They are set to leave the base rate unchanged on Thursday and aren’t expected to make a move until next Spring.

The Food and Drink Federation is forecasting food inflation could reach 5.7% by the end of December and still be running at 3.1% by the end of 2026. Higher employer and packaging taxes are being blamed for increasing costs for companies, which they can no longer absorb.

Wednesday’s inflation snapshot is expected to show that the Consumer Prices Index has crept up again, further away from the Bank’s 2% target, making it even more likely that borrowing costs will stay elevated for longer.

Brent Crude steady after tough session

Brent Crude oil prices have steadied at just under $66 per barrel after falling around 2% yesterday. News of a surprise inventory build of 3.9 million barrels in the US last week is compounding mounting concerns around oversupply as OPEC+ members and other nations plan to boost production.

The International Energy Association expects global oil supply to rise by 2.7 million barrels per day (bpd), more than four times the projected increase in demand, with another 2.1 million bpd supply addition expected next year.

US markets at fresh highs ahead of rate decision

Wall Street closed at yet another record high. Accelerating US inflation, and initial jobless claims jumping to a near four-year high hardly sound like reasons to be cheerful. But core CPI, the preferred measure of the Federal Reserve Bank, was steady at 3.1% and bang in line with expectations. Taken together with the growing signs of deterioration in the jobs market, investors are choosing to focus on the outlook for US base rates where markets are now pricing in a fall of 0.7 percentage points by the end of 2025, with at least a quarter point cut expected next week.

FTSE opens above 9,300. New records in sight

The FTSE 100 opened back above 9,300 and could reach a new high-water mark today. That’s despite UK GDP growth coming in a little slower than expected in the second quarter.

The economy expanded 0.2% in the three months to June, while forecasts had expected growth of 0.3% in line with the previous period. On a rolling basis, quarterly growth has slowed in each of the last three months, with monthly growth stalling completely in July. This provides further challenge to Chancellor Rachel Reeves to plug the UK’s funding gap without stalling the economy in the forthcoming Budget.

There was a marked difference between services and the production of physical goods. Production output fell by 1.4% mainly driven by a fall in manufacturing activity. Services grew by 0.4% with scientific research and development leading the way at 3.4% underlying the importance of supporting UK innovation.

S&P 500 reaches fresh all-time high

The S&P 500 notched yet another closing all-time high, buoyed by optimism after softer producer price data reinforced hopes that inflation is cooling - but the rally wasn’t at full steam. Stocks faded through the session on heavy volume as investors questioned whether valuations have run too far ahead of this afternoon’s CPI print, underscoring a market still balancing optimism with caution.

UK stocks get back on the front foot

UK stocks are back on the front foot after a small stumble yesterday. The FTSE 100 has opened 0.4% higher this morning, tracking the positive sentiment felt across global markets after US producer prices rose at a slower pace than expected.

Oil prices rise on geopolitical tensions

Oil prices are on the move upwards again amid heightened geopolitical risk. Israel’s bombing of targets in Qatar has drawn fresh international criticism and marks an escalation of its campaign in the region.

President Trump is also reportedly putting pressure on the European Union to impose 100% tariffs on China and India, big buyers of Russian oil, to force Putin back to the negotiating table and strike a ceasefire deal over Ukraine. But although there’s a pile-on of supply concerns, a lid is being kept on prices given ongoing concerns about global demand, and only modest increases planned from OPEC+ member countries.

US inflation numbers are in focus

Sentiment could turn sour if today’s inflation snapshot comes in higher than expected. The headline rate is expected to come in at 2.9% but the real number to watch will be core CPI, which strips out volatile food and fuel prices.

Its broadly expected to be stable, coming in at 3.1% on an annual basis, but if it ticks higher month to month, it could put the cat among the pigeons. A sign that elevated inflation isn’t just stubborn but heading higher, could dent hopes for a succession of cuts to come. It’s unlikely to push the Fed off course this month, but the ‘dot plot’ path of cuts ahead may look shakier.

Nonetheless, President Trump is expected to keep up the pressure on the Fed to go further and faster with rate cuts. He’s just been dealt a setback after a federal judge temporarily blocked his removal of Federal Reserve Governor Lisa Cook. The saga is being closely monitored amid concerns that the administration is attempting to direct policy at the the central bank. This is causing unease given that central bank’s independence is seen as crucial for sound monetary policy making.

FTSE 100 opens higher, taking a cue from Wall Street

The Footsie is edging higher in early trade, taking a cue from an upbeat Wall Street and a positive session for indices in Asia. Geopolitical tensions are pushing up oil prices amid spreading supply concerns. Despite weakening global growth prospects, optimism is still swirling given that an interest rate cut from the US Federal Reserve looks firmly on the cards this month.