29th June 2026
FTSE 100 is on the back foot in early trade following fresh attacks in the Middle East.
Brent crude rises to $72 a barrel, as Strait of Hormuz remains tricky to navigate.
Central bankers’ forum in Sintra, Portugal, in focus as investors look for clues about interest rates.
Wall Street set for a rebound with investors turning opportunistic after recent falls.
Susannah Streeter, Chief Investment Strategist, Wealth Club - “The Footsie is on the back foot at the start of the week as investors assess fresh skirmishes in the Middle East, with few catalysts around to spark more optimism.
Brent crude has risen above $72 a barrel, after strikes were reported on ships in the Strait of Hormuz and the US military retaliated. But gains appear to be capped, given that talks are still expected to go ahead between the US and Iran in Doha tomorrow.
Inevitably, with the threat of attacks hanging over the Strait, it’s still a tense time for shipowners. While the key waterway may have reopened, it’s far from business as usual. Shipowners are still navigating an uneasy route, with elevated war-risk insurance premiums and lingering bottlenecks adding to the cost of transit. Another cloud hanging over the waterway is the prospect of tolls for passing through the strait. Although vessels are currently getting through without charge under the temporary agreement, Iranian officials have continued to hint that "service fees" could be introduced once the 60-day period expires. Whether those proposals ever become reality is far from certain, given the legal and diplomatic hurdles involved, but even the possibility is enough to keep shipping companies on edge. It’s another reminder that while the immediate threat has eased, the risk premium attached to one of the world’s most important trade arteries is unlikely to disappear overnight.
Investors will be looking for clues about the direction of interest rates from central bankers due to speak at the ECB Forum on central banking held in Sintra, Portugal, this week. Leaders, including Fed Chair Kevin Warsh and ECB President Christine Lagarde, are scheduled to speak, and investors will want to glean what they can about how far rates might be hiked.
The prospects of higher borrowing costs are concentrating minds, particularly in the US, given how higher rates affect the value of future earnings, upon which so many heady tech valuations are based. Today though investors appear to be taking a glass-half-full approach, with stocks on Wall Street set for a rebound. There will be some opportunistic buying going on, given the recent wobble, as hopes that bumper revenues will keep on rolling in overtake concerns about how high share prices have reached. The delay to OpenAI’s hugely anticipated listing appeared to be the trigger for a fresh sell-off at the end of last week. The company behind ChatGPT is believed to be leaning towards an IPO early next year instead. It’s eyeing a $1 trillion valuation and wants clear water between the SpaceX launch, which has been wracked with volatility, before it attempts to go to market. Bets are now increasing on rival Anthropic launching on the Nasdaq first, as it edges ahead in its paper valuation, and enthusiasm about its enterprise-first focused model. Given the higher demand right now for more predictable revenues, Anthropic has the edge given its secured raft of corporate contracts, rather than OpenAI’s more fickle consumer-based demand.”
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