HL commentary as it happens

Oil gives back some recent gains

Oil prices gave back some recent gains as markets digested OPEC+ plans to boost output and lingering concerns over global growth and trade tensions continue to weigh on the demand outlook. But a larger-than-expected drop in US crude inventories and ongoing geopolitical risks - from the Russia-Ukraine conflict to potential disruptions in Iran and Canada - helped limit further losses. Supply-side uncertainties continue to provide a floor for prices.

US markets rise on positive jobs report

US markets have been riding a wave of bullish momentum this week. Yesterday was a repeat of Monday, with markets shaking off weak futures trading ahead of the opening bell to finish strong. Both the S&P 500 and Nasdaq shrugged off early weakness - largely sparked by the OECD trimming its global economic growth forecast. But, for now at least, investors seem eager for any excuse to buy. Yesterday’s encouraging jobs report delivered just enough optimism to nudge markets another step closer to the record highs set back in February.

FTSE edges higher at the open

UK markets have made another step in the right direction this morning, albeit a small one. The FTSE 100 opened a smidge higher, as investors look eager to shrug off US trade drama. It’s perhaps a signal that markets have moved on from reacting to every new development.

Oil rises on supply concerns

Brent crude oil rose to around $64.80 a barrel this morning, marking its second day of gains as tensions around the world raised concerns about tighter supply. Peace talks between Russia and Ukraine made little progress, while Iran signalled it might reject a US nuclear proposal. At the same time, a wildfire in Canada disrupted production, and OPEC+ chose not to ramp up output more than it already had.

Asian stocks rise despite weak survey data

Asian stocks pushed higher, seemingly ignoring a disappointing Chinese manufacturing survey that showed activity contracting in May. The data highlighted the ongoing toll of the trade war with the US, yet markets held out hope for a potential phone call this week between the US and Chinese leaders. That optimism didn’t extend to commodities, with copper sliding more than 2%, reflecting a more cautious view of global manufacturing demand.

US markets set to give back some of yesterday’s gains

US markets managed to shake off a weak opening and finish with a flourish last night. But with earnings season over, it’s trade talks and economic data that’s driving things, and that tends to be a volatile backdrop in today’s world. Futures markets point to a reversal of most of yesterday’s gains, with investors looking for clues in the data as to whether the US economy is starting to feel the effects of trade disruption.

UK markets open higher, European inflation expected to ease

UK markets have opened with a small spring in their step, with the FTSE 100 up 0.25%. British American Tobacco and Pennon were among those reporting results this morning, both signalling positive profit momentum on the horizon. Broader European markets are joining in, with inflation data out today that’s expected to show further easing - an outcome that would strengthen the case for further rate cuts.

Brent Crude rises amid geopolitical uncertainty

With geopolitical uncertainty swirling, oil prices have pushed higher to above $64 a barrel amid some pressures on supplies. Ukraine drone attacks inside Russia destroyed 40 military aircraft, while strikes on targets in Ukraine have continued. Talks are taking place in Istanbul, but there seems to still be a gulf to surmount for a ceasefire deal to be reached. OPEC+ countries did agree to increase production, but this had largely been factored in and is being seen as attempts to prompt more uniform production, and clamp down on individual nations over-supplying the market.

Calls for retaliation against US-imposed tariffs on steel and aluminium imports

We’re back in a situation of one step forward, two steps back, but there do appear to be expectations that more concessions will be struck. Investors are getting used to aggressive statements being rolled back, so much so the TACO trade theory has rippled through Wall Street, which stands for ‘Trump Always Chickens Out’. But there’s no guarantee that the US President won’t follow through with more onerous restrictions, given he’s stayed steadfast to his pledge to bring more manufacturing back to the US.

It’s a big setback for steel manufacturers around the world, with orders set to be disrupted yet again. There had been high hopes that in the UK some stability would return following the US-UK trade deal but those have now been dashed. Wall Street is set to start the week on a downbeat note. The fresh tariff pledges raise inflationary concerns in the US, given that around a quarter of steel almost 60% of aluminium used in the States is imported, which will push up costs for manufacturers and the construction industry.

FTSE 100 is down in early trade after falls in Asia

The Footsie is struggling to cling onto ground as undercurrents of pessimism wash over markets and new fractures in the global trade war open up. Trump’s pledge to double steel and aluminium import tariffs have caused fresh uncertainty, especially with the European Union vowing to retaliate against the measures. Negotiations between the US and China also appear to be in disarray after China accused the US of ‘severely violating’ their trade truce and pledged to enact measures in response. It comes after Trump said Beijing ‘totally violated its agreement’.

Uncertainty weighs on oil prices

Brent crude prices have fallen to around $63.1 reflecting the mixed signals emerging from Washington over tariffs. A larger than expected 2.8mn barrel drop in US crude inventories helped steady nerves a little. But on the supply side Kazakhstan is resisting production cuts despite pumping out more than its agreed limits. Attention now turns to tomorrow’s OPEC+ meeting where producers are expected to give the nod to a further hike in output in July.

Dollar gains reverse on tariff flip flop

The dollar has given up most of the gains it netted following the initial court ruling. America’s safe haven status has been steadily eroded in recent months reflected by rising bond yields and a weakening currency. The prospect of increased taxes on overseas investors in US assets could see a further flight of capital if Trump’s ‘big, beautiful tax’ bill clears the Senate unchanged next month.

US initial jobless claims higher than expected, PCE inflation the focus for today

Markets will be hoping May’s core PCE inflation number out later today won’t stray much above annualised forecasts of 2.5%. However, the numbers need to be taken with a large pinch of salt given that they’re yet to feel the full impact of tariffs. Any sign of worsening inflationary pressure is likely to weigh on expectations for further interest cuts by the Fed this year which would be a worry given the inertia building in the economy. On that front there are also some vital signs for consumer health to read today. Personal spending growth is expected to have slowed from 0.7% to 0.2% while the University of Michigan Consumer Sentiment index is forecast to fall from 52.2 to 50.8.

US courts keep tariffs on table for now

When it comes to global trade right now the only certainty is uncertainty. Just a day after US courts halted the lion’s share of Trump’s recent tariff increases, judges have temporarily reinstated the new border taxes. Little wonder markets are struggling for direction. The Footsie is trying to lift its head above water this morning. But Asian stocks were generally down over night and US futures are pointing to a weak open later today. Investors on Wall Street are also weighing up slightly weaker than expected employment data. Last week’s initial jobless claims rose 14,000 to 240,000 with expectations now rising for an uptick in US unemployment which was last reported at 4.2%.