HL LIVE
HL commentary as it happens
Wednesday 22nd October
Oil prices continue to rise from near multi-year lows
Brent Crude prices have continued their upward march from near multi-year lows, moving 1.7% higher to around $62.4 per barrel this morning. The uplift comes amid renewed supply-side fears after reports that the planned Trump-Putin summit has been postponed. Moscow’s refusal to agree to a ceasefire in Ukraine is sparking fears that tensions are rising and sanction-related disruptions could tighten near-term supply.
Gold prices stabilise after a sharp drop yesterday
Gold prices have stabilised at around $4,120 per ounce this morning, after the sharpest drop since 2021 saw gold down 5% in yesterday's session. The downward pressure came from traders locking in gains from the recent record-breaking rallies and hopes of easing US-China tensions dented gold’s safe-haven appeal. Still, gold remains up around 60% year-to-date.
FTSE moves higher at the open
The FTSE 100 opened up around half a percentage point this morning, buoyed by September’s UK annual inflation print of 3.8% coming in below market expectations of 4.0%. This month’s figure was unchanged from the previous two, as rising transportation costs offset easing pressures on food and non-alcoholic beverages. While inflation has moderated significantly since its post-pandemic highs, it remains nearly double the Bank of England’s target rate of 2%, limiting its ability to push through further rate cuts for fears of reigniting inflation. As a result, markets are only forecasting two more rate cuts by the end of 2026.
Tuesday 21st October
Commercial building slumps
Property market data specialists CoStar report that UK commercial building activity is now at the weakest level in over a decade. Worst still the pace of new building starts is at the lowest level in a century. Demand for new office space has been weak since the pandemic, but the building sector has also struggled with rising costs, and the two factors have combined to hit returns for developers, explaining their reluctance to commit to new projects. Demand is strongest in London, also around Oxford and Cambridge where the Life Sciences sector is expanding. Elsewhere, though, the story is one of weakening commercial property markets, from offices to industrial and warehousing. Land values are being hit hard as a result.
UK Government borrowing rise highlights funding challenges
Borrowing figures out this morning highlight the challenge facing Chancellor Rachel Reeves ahead of November’s budget. Last month, the UK government borrowed £20.2bn, taking borrowing for the first half of the fiscal year to £99.8bn, up £7bn on the same point last year. Much of the increase is down to the rising cost of servicing the government’s existing borrowings, highlighting the fragility of the government’s position. It basically needs to borrow more money to pay the interest on the money it has already borrowed. Without an uptick in tax revenues or a decrease in interest rates, this situation will not go away.
Oil struggles as production increases hit home
Oil markets have been weakening in recent weeks to leave Brent crude futures hovering around $61.1, little changed on the day but far below the $70 level seen in late September. Traders are increasingly concerned about the sheer quantity of supplies of crude oil out there. Successive production increases from the OPEC nations have raised output, but much of that extra output has simply been loaded onto tankers and left floating at sea, unsold. Traders know that sooner or later these floating supplies will hit the market, which could send crude prices down further.
Wall Street rallies, Asia pauses for breath
Wall Street rallied strongly last night, with the S&P 500 index gaining 1.1% and the tech-heavy NASDAQ index as much as 1.4%. Investor optimism was boosted by hopes of trade tensions easing and renewed enthusiasm over the potential of AI to drive corporate earnings higher. The sentiment spilled over into trading in Asia overnight, but by the end of trading the rally had begun to flag, with many markets giving up much of their gains. There are of course plenty of profits that can be taken. Despite everything that has passed across our TV screens, the US stock market is up over 14% so far this year, with NASDAQ closer to 20% ahead. European stocks are up by almost 13% and Asian markets have gained an extraordinary 25% in 2025.