HL LIVE
HL commentary as it happens
Thursday 18th June
Bank of England holds rates at 3.75%.
The Bank of England has opted to stick with the interest rate at 3.75% - where it’s sat since December. Two MPC members voted for a rate rise, pointing to ongoing inflation pressures.
Tuesday 16th June
Oil steadies, deal still uncertain
Oil prices have steadied in the low $80s, but the market is not treating the reported US-Iran deal as done and dusted just yet. The proposed agreement could reopen the Strait of Hormuz, a vital route for around a fifth of global oil flows, and President Trump has said oil should begin moving freely again once the deal takes effect. But with the details still unpublished and the formal signing not expected until Friday, investors are understandably a little cautious.
Markets reset after relief rally
Global stock markets look set for a more settled session today, with futures pointing to a return to something closer to normal after yesterday’s relief rally. The FTSE 100 had a mixed day, held back by its heavy weighting toward energy as oil prices fell sharply and dragged on the likes of Shell and BP. Across the pond, Wall Street was in a much brighter mood, with new highs for some indices as investors cheered the combination of lower oil prices, less pressure on inflation and a reduced risk of further rate hikes following President Trump’s US-Iran deal. Tech was the clear winner, as growth stocks benefited from a backdrop that suddenly looks a little less hostile, though the rally's durability still depends on the deal holding together.
Friday 12th June
UK growth contracts in April
UK GDP data added a softer tone beneath the market rally, with the economy shrinking 0.1% in April and showing the first real signs that the strong start to the year is beginning to crack. Services took most of the strain, with households cutting back on non-energy spending and activity falling across more than half of the major sub-sectors, while the boost from stockpiling in manufacturing looks unlikely to last. The figures leave the economy on course for a much weaker second quarter, and while inflation risks have not disappeared, the loss of momentum makes it easier to argue that the Bank of England will keep rates on hold.
Oil eases, supply risks linger
Oil prices have eased back into the mid-$80s per barrel, their lowest levels in two months, as hopes of a diplomatic breakthrough take some of the immediate risk premium out of the market. But even if a deal is reached, getting supply back to normal will not be as simple as flicking a switch, with mines in the Strait of Hormuz to clear, idled production fields to restart, and damaged energy infrastructure to repair. That means oil markets may be breathing a little easier, but the path back to smoother flows could take us into the latter part of the year.
Markets cheer fresh Iran deal hopes
The FTSE 100 was up this morning, following a sharp rally on Wall Street last night and overnight gains across Asia, as investors latch on to signs that the conflict with Iran may yet be pulled back from the brink. The catalyst was President Trump pressing pause on planned strikes and suggesting a deal could be signed as early as this weekend, giving markets another reason to lean into risk after a tense few sessions. It has the feel of a classic “escalate to de-escalate” playbook. Still, with the US mid-term elections approaching and the economic stakes rising globally, there is a clear incentive on all sides to find a quick resolution.