FTSE 100 Set to Open Higher on Trump “Deal Next Week” Framing; Brent Pulls Back to $96.20
London stocks are set to open higher Tuesday at around 10,395, up 0.63% from Monday’s 10,330 close, as Trump’s “deal next week” comments overnight partly reverse Monday’s risk-off trade. Brent crude has pulled back 2% to $96.20 a barrel from Monday’s $98.20 close. UK 10-year gilt yields ease back to 5.05% — still above the 5% line but off Monday’s 5.08% close. Sterling is firmer at $1.3410; gold has eased to $4,460 an ounce. The VIX is down 5.5%. Defence stocks BAE Systems, Babcock and Melrose are likely to give back some of Monday’s gains; oil majors BP and Shell may pull back on the Brent fall.
The Tuesday open reflects the renewed Iran-deal optimism but does not fully reverse Monday’s risk-off. The structural macro environment remains whiplashed between the two competing scenarios: Trump signs and Brent moves to $80-90 (bull case); Iran talks suspension hardens and Brent moves to $105-115 (bear case). UK Treasury / Bank of England fiscal-policy positioning is still under direct macro pressure: even at 5.05%, the gilt yield is well above last week’s sub-5% Friday close and tightens the Reeves cost-of-living-package fiscal headroom calculation. The Bank of England Monetary Policy Committee’s next decision is the binding macro variable; if Brent stays above $95 through mid-June, the next rate cut may be delayed.