Markets Wednesday Open: Soft UK PMI and Reeves-Replacement Reporting Weigh on FTSE; Gilts Rise
UK and European markets opened Wednesday lower on the soft UK PMI data and the BBC Reeves-replacement reporting. The FTSE 100 opened at 10,670, down 0.14% on Tuesday’s close. Brent crude eased to $85.20 on continued Iran framework progress. Sterling softened to $1.3445 on the Chancellor-replacement question. UK 10-year gilt yields rose to 4.86% as the Burnham-Reeves continuity signal evaporated. The August Bank Rate cut probability now exceeds 50% per market commentary on the PMI data.
The Wednesday open is structurally negative: the BBC Reeves-replacement reporting materially invalidates the rating-agency-pricing assumption that had held through the leadership-transition window. The PMI 14-month-low reading compounds the pressure. The Brent $85-95 band that delivers a flat Ofgem October price-cap reset is now well below the lower bound; the Q4 energy-cost positioning may benefit. The Bank of England MPC’s August decision remains the binding UK macro variable; the cut probability above 50% is the structural pricing acknowledgement of the soft data trajectory.