He said it makes it difficult to know who to believe, and makes “trading these headline-driven markets in general quite difficult to navigate”.
US stocks started higher, but have flattened off, with the tech-heavy Nasdaq now only one point in the green.
The Dow Jones is up 0.3% at 45,315, while the S&P 500 has added 0.15%.
Meanwhile, the FTSE is holding onto most of its gains, having topped 10,080 in recent minutes.
Donald Trump, in what are starting to feel like customary pre-Wall Street open Truth Social posts, said the US is in “serious discussions” with Iran.
He said the talks were being held for a “new and more reasonable regime” to end the war.
“Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately ‘Open for Business,’ we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet ‘touched.’
“This will be in retribution for our many soldiers, and others, that Iran has butchered and killed over the old Regime’s 47 year ]Reign of Terror’,” he said in the post.
Money transfer specialist Wise PLC (LSE:WISE) is moving into bank territory with the launch of current accounts in the UK.
The fintech launched UK current accounts today, offering to its 3 million active customers and businesses in the UK.
Noting that £250 billion is held in UK current accounts earning zero interest, Wise said its current account customers could earn a 3.26% variable rate on GBP balances through ‘Wise Assets Interest’.
Looking to attract customers, Wise is enabling features for account holders such as allowing them to buy airport lounge passes through the app, and offering accounts for children under 18 linked to a parent’s account.
Wise’s chief product officer said tradiational banks “haven’t kept pace with what customers expect for their current account. People shouldn’t need separate accounts for home and abroad. With the Wise current account, we’re giving customers a smarter way to manage their daily financial needs.”
12.24pm:
Flutter Entertainment PLC’s (LSE:FLTR, NYSE:FLUT) prediction markets app could generate $125 million in annual revenues not yet factored into company guidance or market consensus, according to Jefferies.
The investment bank has a 16,000p price target on the global betting and gaming group, which is more than double the current share price, which sits at 7,636.95p, up 34.95p today.
Analysts note that FanDuel Predicts, Flutter’s prediction market app, has sustained strong download momentum following its first major marketing campaign earlier this month.
Daily downloads peaked at 48,000 on 14 March before settling at an average of around 11,000 over the past week, well above the 3,000 daily average recorded through February prior to the campaign launch.
Marks and Spencer Group PLC (LSE:MKS) is dipping another toe in the US clothing market via an agreement to sell a “curated selection” of clothing products with Nordstrom.
Nordstrom will offer a selection of around 60 M&S womenswear items in-store and online.
M&S, which has a US-facing online store, says it is “the first time M&S Fashion will be sold in store in the US and follows the success of M&S Food, which landed in Target back in 2022”.
M&S points out that just over one in 10 customers in the US are aware of M&S as a fashion brand and so it hopes Nordstrom’s “broad customer reach” will help it build brand awareness.
Market analyst Danni Hewson at AJ Bell says: “UK corporate forays in the US have been more akin to 90s bands’ largely desultory efforts than the successful British invasion of groups like The Beatles and The Rolling Stones in the 60s.”
She notes that it comes nearly a quarter of a century after M&S sold the Brooks Brothers clothing chain, which was dumped at a significant loss after “a genuine retail disaster story”.
“This is a much more cautious approach than it previously pursued but could nonetheless be significant if it can tap even a portion of what is an extremely large market.”
The food launch with Target has been “successful if modest”, Hewson says, “and shows the brand is not sitting still as it looks for different paths to growth”.
Inflation will rise and growth will fall regardless of how quickly the conflict ends, says UBS economist Dean Turner, but he thinks markets are overdoing expectations for Bank of England rate hikes given already-soft labour market conditions.
Even if the war ended today, with the Strait of Hormuz fully opened, it will likely take “many weeks” for flows of oil and LNG to return to previous levels, while damage to energy infrastructure means it could be “years” for flows to return to pre-conflict levels, says Turner.
“So, it is as certain as anything can be in the world of economics that inflation will be higher and growth lower in the coming months.”
The FTSE and S&P 500 have fallen around 7% over the past month, while on bond markets, yields on 10-year US Treasuries and gilts have soared due to expectations for higher inflation and weaker growth.
While this is “not an unreasonable assumption”, Turner says expectations for central bank policy U-turns, which also are a key driver of bond markets, are “more questionable at this stage”.
Rising inflation has flipped market expections from one or two BoE rate cuts this year, to either two to four hikes before the end of the year.
“Unquestionably, the BoE delivered a hawkish message at the last meeting, but speeches since then have seen the tone become a little more pragmatic,” Turner points out.
“One thing is clear to us: rate cuts are off the table for the time being, and we currently think that November is the earliest opportunity for this.
“But the need for rate hikes is much more questionable. As many have already pointed out, there is nothing that monetary policy can do to offset the closing of the Strait of Hormuz; second-round effects of higher prices (read as accelerating wage growth) are the focus.
“Given the evident softness already in the labour market, our view is that market expectations for hikes are overdone.”
However, as the conflict continues, he says “it makes sense” for investors to consider reducing risk in portfolios, “and using periods of volatility to rebalance investments in line with long-term investment plans”.
US proposals to end the war, says the spokesperson for Iran’s Ministry of Foreign Affairs, are “unrealistic, illogical and excessive”.
Esmaeil Baqaei told reporters that Iran received messages via intermediaries indicating the US’s willingness to negotiate, Reuters reports.
“Our position is clear. We are under military aggression. Therefore, all our efforts and strength are focused on defending ourselves,” he says.
Yesterday foreign ministers from Pakistan, Egypt, Saudi Arabia, and Turkey convened in Islamabad to discuss reopening the Strait of Hormuz shipping lanes.
Mortgage approvals rose to 62,600 in February from 60,200 in January, above the consensus forecast of 60K.
Meanwhile, households deposited a net £5.8 billion into banks and building societies, up from £4.3 billion the previous month – with £4.6 billion flowing into ISAs alone ahead of the tax year end.
The effective rate on newly drawn mortgages edged up to 4.10% from 4.09%.
Analysts note the figures predate the Middle East conflict and the inflationary pressures it has triggered, making them something of a snapshot of a more optimistic moment that has since passed.
“Consumers appeared comfortable with their levels of savings just prior to the War in Iran, suggesting a willingness for households to partly smooth consumption through the latest energy price shock,” says Elliott Jordan-Doak, economist at Pantheon Macroeconomics.
The improvement in housing market activity matched the good mood seen in the lending data, he says.
“But we think activity in the housing market will grind down over Q2, with much of the hit to activity in the housing market coming from a blow to sentiment, given how sensitive the market has been to the newsflow over the past few years.
“That said, fundamental affordability will also deteriorate if the MPC hikes interest rates several times this year, as the market is expecting. So, we now expect house prices to rise by just 1.0% year-over-year in Q4 2026, down from our call of 3.0% before.”
While the FTSE and other European indices are higher, “intense wariness remains” in financial markets, says market analyst Susannah Streeter at Wealth Club, as concerns about the Iran war’s duration continue.
President Trump’s words are “no longer holding as much sway, with increasing scepticism about his claims about the war’s trajectory”, says Streeter.
“While last week his boast that significant progress had been made in talks saw a sharp reversal in oil prices, today it’s a different story. Brent crude is staying stubbornly elevated, at the painful level of above $115 a barrel, as traders assess an increasingly complex and intractable conflict.”
But she notes that Trump’s messaging is also complex, if not confusing; threatening escalation on one hand, positioning to seize the strategically important Kharg Island, on the other he is claiming a deal is close to being done.
“The warnings that crude prices could hit $150 a barrel if the war continues for many weeks or even months are a highly troubling prospect. Qatar forecast that possibility and Iran has warned that crude prices could even hit $200 a barrel.
“Given the destruction of energy facilities and the ongoing blockade of the Strait of Hormuz, any big retreat in crude prices looks unlikely right now. However, there are no shortages of supply, and panic at the pumps will cause even more problems.”
After just over an hour of trading, the FTSE 100 is firmly higher, with many of the index’s heavyweights putting in solid gains.
Of the top 12 largest stocks, only two are in the red (HSBC down 0.5% and Rolls down 0.2%), with many of them up well over 1%.
While oil giants Shell and BP are both up around 1.5% due to the elevated crude price, AstraZeneca, BAT, Glencore, National Grid and BAE Systems are all up strongly.
Rio Tinto is top of the risers after reassuring investors that it is keeping guidance intact after a tropical cyclone caused some shipping terminals to shut.
London has a new arrival on the market this morning.
Halo Minerals, a company looking to extract copper from legacy mining waste in northern Chile, has raised £4 million and listed on AIM.
The shares started on the back foot as trading began this morning, dropping 4% to 17.25p from the 18p issue price of the initial public offering.
Operations are focused on processing tailings at the 100% owned Playa Verde project in the Atacama region, the prolific copper-producing area where BHP’s Escondida mine is based, along with operations of state-owned giant Codelco, which has partnerships with Antofagasta, Freeport-McMoRan and Rio Tinto.
The FTSE 100 has begun the week slightly on the front foot, up around 13 points to just over 9,980.
A 3.6% rise for Rio Tinto, outperforming smaller gains for the wider mining sector, with Glencore next, up 0.9%.
Housebuilders such as Barratt Redrow and utilities such as SSE were helping, likely to be boosted as government bond yields retreated (see analysis below).
Biggest fallers are 3i Group, Informa, HSBC and Whitbread.
Boohoo Group PLC (AIM:DEBS) has delivered underlying profits comfortably ahead of its own guidance, with EBITDA up 36% to £53 million in the year to February, driven by a 76% surge in the second half.
The online fashion retailer, which operates under the Debenhams brand, said the second-half growth reflected the accelerated impact of its cost-cutting and restructuring programme.
Chief executive Dan Finley said the business had reset its cost base, completed a warehouse consolidation, migrated to a new technology platform and “rightsized” its stock levels – work he described as “significant progress, ahead of our plan”.
Finley has also nudged up the outlook for the coming year too.
With a new threat to shipping through the Suez Canal over the weekend, oil prices have continued to climb as we start a new week, with Brent crude topping $116 a barrel earlier and sitting above $115.
“Several factors have contributed,” says Henry Allen at Deutsche Bank’s macro strategy team, but the joining of the Iran-backed Houthis to the Middle East conflict over the weekend, launching strikes at Israel, has raised “fears about a new front in the war”.
The Wall Street Journal has also reported this morning that President Trump is weighing a military operation to extract Iran’s uranium, adding to the FT interview where he Trump openly suggested the US could take the Kharg Island export hub.
“So there’s still no sign of a clear end to the conflict, and given the various headlines, investors remain fearful about a fresh escalation.
“With everything that’s happened, the market impact is becoming increasingly serious,” he says, with the S&P 500 down for five consecutive weeks for the first time since 2022, back when the global economy was facing a similar stagflationary shock, while the Nasdaq fell over 3% last week to mark its worst weekly performance since Trump’s tarriff announcements last year.
“Fears about a longer conflict are evident from the energy futures curve,” says Allen, with three-month Brent crude futures up another 1.8% this morning to $100.50 a barrel, which would be their highest closing level since the conflict began.
“So it’s becoming clear that markets are expecting an extended period of high oil prices, with stagflationary implications for the global economy.
“Interestingly though, the primary concern this morning has shifted back to the growth side rather than inflation. So markets are pricing out the likelihood of imminent hikes and sovereign bond yields have fallen.”
On the index swaps market, the next ECB meeting in April below 50% for the first time in over a week, while US 10yr Treasury yields fell back overnight from their eight-month high on Friday.
“Meanwhile for equities, US futures are stable this morning, with those on the S&P 500 unchanged, but they’re more negative in Europe, with DAX futures down -0.65%.”
The FTSE 100 is expected to start the week with a decline of around 24 points, as energy prices continue to climb amidst threats to key shipping lanes in the Middle East and rhetoric from US President Donald Trump.
Brent crude is standing above $115 a barrel, similar to levels reached at the end of last week, with investors weighing the risk of further disruption to global energy supplies and ensuing inflation.
Trump said a deal with Iran was possible but said his preference would be to “take the oil”, he told the FT, which would involve ground troops seizing the key export hub Kharg Island.
But, per Reuters, he told reporters on Air Force One: “I think we’ll make a deal with them, I’m pretty sure. But it’s possible we won’t.”
The London index closed at 9,967.35 last week, down around five points on the last day of trading, up around 50 over the week but down over 800 points since the start of the month.
Asian markets are down this morning, with Japan’s Nikkei 3%, while the Hang Seng is down 1% and India’s Sensex 1.4% lower.
