- Mixed start for equity markets, UK set for positive open
- Weak UK jobs data gives hope that the BOE can hold rather than hike
- Standard Chartered reveals new medium-term targets
- Oil prices ease a touch as US holds off on fresh attacks
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“Global equity markets are looking positive this morning, with the FTSE 100 building on yesterday’s strong showing as oil prices ease back from recent highs. President Trump’s decision to hold off on a fresh round of attacks on Iran has raised hopes that a deal may be close, helping ease some of the immediate heat in oil markets. But even if tensions cool from here, supply will not ramp back up overnight, leaving investors facing the prospect of elevated oil prices for a while yet. That could make for an uncomfortable few months, with higher energy costs feeding through to businesses and consumers.
The latest UK jobs data puts a softer labour market back at the centre of the rates debate, and may help take some heat out of the recent rise in gilt yields. Payroll employment fell sharply in April, while vacancies and claimant numbers also point to a hiring backdrop that has weakened since the Iran war began. The important point for markets is that businesses appear to be responding to higher costs by cutting headcount, not by pushing wages materially higher to compensate workers. That should help keep the coming inflation spike contained to a short-term energy shock rather than the start of a wage-price spiral, giving the Bank of England a little more room to sit tight rather than rush into further rate hikes.
Standard Chartered’s investor day has given markets a fresh set of medium-term targets, with the bank now aiming for stronger returns, better efficiency and sustained income growth through to 2028 and beyond. The headline goals look broadly achievable rather than wildly ambitious, which probably suits a bank that has spent years trying to prove it can deliver more consistent results. The planned headcount cuts are sure to grab headlines, but the bigger message is that management is trying to strip out complexity and fund growth areas like Asian wealth and corporate banking without letting costs run away. The investment case still leans heavily on familiar themes: growth in affluent banking across Asia, stronger fee income, and ongoing cost discipline.
Oil prices have eased a touch this morning, with Brent crude slipping back to around $110 a barrel after President Trump held off on a planned strike on Iran. That pause has given markets a reason to breathe, raising hopes that talks can restart after Saudi Arabia, Qatar and the UAE reportedly urged the US to give diplomacy more time. There are still big hurdles to clear, not least Iran’s nuclear programme and disruption around the Strait of Hormuz, but even a small step away from escalation matters when energy prices have been one of the biggest worries for investors.”
