HL LIVE
HL commentary as it happens
Monday 2nd February
Iran de-escalation releases pressure on oil prices.
Brent Crude prices are down over 5% to around $65.6 per barrel after the White House and Tehran made positive noises about diplomacy. But the US Navy continues to maintain a high presence in the Middle-East, so the potential for tensions, and oil prices to ratchet up again remains a possibility.
US stock futures weak as inflation fear returns.
Futures for all the major US indices are pointing downwards this morning. Friday’s non-farm payroll print is the key economic data point to focus on after the tail end of last week revealed a month-on-month increase in producer prices of 0.5%, higher than forecast and the biggest increase in five months. Forecasters are expecting the addition of 70,000 hires, an acceleration from 50,000. A significantly higher number has the potential to dampen expectations of further rate cuts by the Fed and take the steam out of equity markets.
Rate decisions ahead in UK, EU and down under.
It's a big week for central bank meetings, with the Reserve Bank of Australia first up and expected to buck the prevailing trend with a rate rise to 3.85% following higher than expected inflation and strong employment data. Closer to home markets aren’t expecting any change to lending costs at the European Central Bank (now at 2.0%) or the Bank of England (3.75%). But with UK unemployment at a four-year high of 5.1%, jobseekers will be hoping that Andrew Bailey’s comments will set the scene for further reductions in the base rate.
Metal prices continue to fall
Mining stocks are likely to feel the heat as metal prices scramble to find a floor. Oil prices are also trending the wrong way for investors in commodity-focused companies. The silver bubble well and truly popped on Friday after lenders upped their margin calls to speculators. That followed Donald Trump’s nomination of Kevin Warsh, one of the more hawkish contenders in the race, for the top job at the Federal Reserve bank.
There’s no sign of a silver lining this morning either, with another double-digit decline showing on traders’ screens. Gold is following a similar but far less pronounced pattern. In industrial metals, Copper has also seen a flight of speculative funds, although here, the long-term demand runway combined with limited new production set to come on stream should provide some support.
Friday 30th January
Oil prices head for best month in over two years
Brent Crude prices slipped slightly lower on Friday morning to $68 per barrel. But the black stuff remains on track to record its best monthly gains since July 2023, amid rising geopolitical tensions in both Venezuela and Iran. US President Donald Trump has called for Iran to engage in nuclear talks, while Iran has threatened retaliation. If this spills over into military conflict, it could put further upward pressure on oil prices, not only to over 3 million barrels of daily oil production, but also disruption to tankers carrying oil and Liquid Natural Gas through the Strait of Hormuz.
Gold on track for best month since the 1980s
Gold prices have slid more than 5% this morning to around $5,150 per ounce, as investors look to take some profits. Still, the yellow metal remains on track for a monthly gain of over 20% - its strongest performance since the 1980s. Not bad for an asset that has little to no real-world utility and produces nothing, unlike farmland or businesses that can produce food, goods and cash.
FTSE marginally up as US futures slip lower
The FTSE 100 opened marginally up this morning, but there was little in the way of big UK stock news to nudge it majorly in either direction. With earnings season now in full swing, US stock futures slipped lower as software names continue to lose ground over fears that AI will disrupt their businesses.
Thursday 29th January
Brent Crude reaches four-month high as Iran standoff intensifies
Brent Crude oil is now at over $69 per barrel, the highest level seen in four months as the war of words between hardened leaders Donald Trump and Iran’s Ali Khamenei ratchets up. If this spills over into military conflict, the concern for energy is not only over 3 million barrels of daily oil production but also disruption to tankers carrying oil and Liquid Natural Gas through the Strait of Hormuz.
No change to Fed rates, Powell surprised by US economic strength
As expected, there were no changes to US base rates yesterday, but Jerome Powell’s commentary painted a picture of underlying strength in the world’s largest economy, which even he admitted had caught him by surprise. Easing inflation, solid growth and stable employment mean the bank’s in no hurry to cut rates again with markets not expecting a further cut before Powell’s scheduled departure in May.
As it stands, his successor looks set to inherit an economy heading for a soft landing, or better still, no landing at all. But he was quick to stress the importance of continued independence and the need to steer clear of elected politics, most likely a response to Donald Trump’s continuing pressure for looser monetary policy. If the economy is allowed to overheat, there’s a chance that these solid foundations start to crack.
Wednesday 28th January
Gold continued its climb, hitting yet another record
The sell-the-dollar-buy-bullion shift saw gold spike yet again yesterday to new record highs, reaching more than $5,200 an ounce. Goldman Sachs estimates that central banks will target around 20% of reserves in the precious metal, and China is currently at around 8%, which alongside continued geopolitical uncertainty should prop up the gold price, though we do not think that this level of outperformance is sustainable.
The dollar fell to 2022 levels as US President, Donald Trump, commented that the recent weakness was “great”
Some data on the magnitude of yesterday’s dollar slump; the worst day for the greenback since Liberation Day, falling to levels not seen since 2022, and off the back of 2025 being the worst year since 2017. Yesterday’s drama was self-inflicted. Recent weakness was exacerbated by US President Donald Trump commenting that the decline was “great” triggering, well, more of a decline. This is an about turn from Trump’s previous stance that a weak dollar indicated a weak nation, which is not on brand for the King of Maga. The 180 may be partly about saving face, but Trump has also identified a weak local currency is good for “business” – which was widely interpreted as meaning US exports. Devaluing your currency to boost exports is something Trump has accused other nations of in the past.
Yesterday was just the latest negative day in a long line. Sentiment towards the dollar has been waning for some time – prior to Trump taking office in January 2025, though his combative nature with the Federal Reserve Chair, Jerome Powell, erratic foreign diplomacy and trade tariff by tweet has not helped. Global central banks have instead favoured gold as their reserve currency of choice, which they believe insulates them from US policy dependence. Certain nations will have observed the threat of Russia having its USD assets seized by global players supportive of Ukraine, and subsequently considered the metal a more attractive neutral reserve.
Expect some relief rally today due to the severity of yesterday’s fall, but we are not optimistic about the medium-term outlook for the dollar given Trump’s leadership style. Dollar weakness can create investment opportunities for investors here in the UK – it is good for US-based firms with global revenues, and good for emerging markets – an area we think looks unloved going into 2026.
Tuesday 27th January
American forces gather in Persian Gulf but oil price dips
Brent crude oil prices have come back a little further from four-month highs to around $65.3 per barrel. The resumption of exports from Kazakhstan’s Tengiz oil field is adding to the oversupply narrative. That could see over one million barrels of oil per day find its way onto the market. However, the presence of a US naval Armada heading towards the coast of Iran has kept a lid on losses as fears grow of disruption to oil and gas production and transport in the Persian Gulf.
US Stock Futures mixed
US Stock Futures are on the fence, with the Dow Industrial down a touch but the NASDAQ pointing upwards ahead of key tech earnings tomorrow.
Gold and Silver rallies resume ahead of the first Fed decision for 2026
Despite resilient appetite for risk assets, Gold, a go-to safe haven, is up again today and looks to be heading back to the $5,100 mark. Silver is having an even stronger run up nearly 9% to over $113. The International Monetary Fund’s managing director, Kristalina Georgieva has stoked fears of further dollar weakness and the inflow into metals is likely to include a slice of speculative monies ahead of tomorrow’s interest rate decision by the Fed.
Markets aren’t expecting any changes to lending rates, but markets will be watching keenly to see if Chair Powell, who’s kept a tight grip on monetary policy, is to be replaced by a Trump dove before the end of his term on May 15.
Asian bourses rally despite fresh tariffs on South Korea
Asian markets were mostly up overnight, including a new record high Seoul’s KOSPI which initially dipped after Donald Trump announced an increase in tariffs from 15% to 25% on South Korean exports. The rise applies to goods including cars, timber and pharmaceuticals on the premise that Lee Jae Myung’s government had been slow to implement last year’s trade deal. But Washington’s climb down on tariffs to European trade partners has added to investor scepticism over the President’s resolve to push through higher import taxes. With a delegation on its way from Seoul to Washington, markets are viewing this latest twist as more carrot than stick.
FTSE up at the open
In a light day of economic data points and earnings reports, the FTSE 100 has taken its cues from overseas markets with nearly a 40-point gain after the opening bell. Less than one month into the year, London’s flagship index is up around 2% in 2025. That’s been led by some big gains in the mining sector, which has been boosted by soaring metal prices and consolidation activity. But with some 64 of the 100 largest companies listed in London in positive territory, the rally also has some breadth.