Markets Friday Open: Sterling Firms to $1.3420 on Burnham Clarity; Gilt Yields Ease; FTSE Opens at 10,750
UK markets opened Friday with sterling firmer at $1.3420 from Thursday’s $1.3380 close on Burnham win political clarity; UK 10-year gilt yields eased to 4.80%; the FTSE 100 opened at 10,750, up 0.28% on Thursday’s close. The Burnham-Reeves continuity signal is the structural reason for the market-positive response: rating agencies expect the leadership transition to deliver continuity at the Chancellor position. The August Bank Rate cut probability holds above 40% per Bank of America commentary. Brent crude held at $87.30 a barrel.
The market-positive Burnham-clarity response is the structural confirmation that the rating agencies’ Tuesday assessment of the Burnham-Reeves continuity has held through the by-election outcome. The political-mathematical implication is that the leadership-transition uncertainty is now materially reduced; gilt-market positioning for the leadership-transition scenario is consolidating around the structured-succession base case. The Brent $88-95 band that delivers a flat Ofgem October price-cap reset remains the operative range; Brent at $87 sits below the lower bound. The Bank of England MPC August decision remains the binding macro variable.