Weekend Markets Recap: FTSE Closed Roughly Flat; Iran Strikes Overnight Set Up Monday Open
UK and European markets close the week on a roughly flat picture. The FTSE 100 closed Friday at 10,405, up 0.48% on the day but roughly flat on the week; Brent crude eased to $95.80 a barrel. UK 10-year gilt yields closed at the 5.00% line. Sterling firmed to $1.3415. The Sunday Asia open is the next pivot point; if the US-Iran overnight strike exchange escalates further and Hormuz remains closed, Brent is likely to gap higher through the Asian session. Defence stocks BAE Systems, Babcock and Melrose are likely to lead Monday gainers.
The week traded between 10,330 Monday low and 10,460 Friday-week-ago high; the 10,400-10,410 range is the new structural balance level. The 5.00% gilt yield is right at the binding macro-political resistance level for the Reeves Treasury. The Bank of England MPC’s next decision in just over a week is the binding macro variable. The Ofgem October price-cap reset depends on Brent staying in the $88-95 range through mid-summer; the current $95.80-and-rising trajectory points to a price-cap rise rather than a roll-back. If Hormuz stays closed through Sunday, the Monday open will see Brent gap to $100-105 and gilt yields back to 5.05%-plus.