Yesterday was a bad day for European stock markets. Caught up in the escalating conflict between Israel and Iran, the United States announced that the White House is giving itself two weeks to decide whether or not to intervene against Tehran.

Karoline Leavitt, the US president's spokesperson, read a message from Donald Trump to the press: "Based on the fact that there’s a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks".

This measured response is more effective than it appears. It allows the US executive to regain control of the narrative and buy time. The main problem facing the White House in recent days is that it is being dictated to by Israel, while having to deal with deep internal divisions over the strategy to adopt. By setting this two-week deadline, Washington hopes to give itself a chance to regain the upper hand.

Financial markets remain tense at the prospect of the United States entering the military fray in the Middle East. The stock market was closed yesterday in New York due to a public holiday, but European markets gave a good indication of the general mood. The Stoxx Europe 600 index fell for the eighth time in the last nine sessions. It is now just over 5% below its record high of March 3, although it is still up 5.5% for 2025. Luxury goods were again particularly affected yesterday, as they are on the front line of the current economic woes: weak recovery in China, fears about US growth and geopolitical tensions weighing on tourist flows.

Yesterday's news from Europe was marked by a series of central bank decisions, notably rate cuts by the Swiss National Bank, the Bank of Norway and the Bank of Sweden, while the Bank of England took no action.

Comments on the two-week reflection period eased the atmosphere somewhat during the night. Oil reversed the upward trend that had taken it to nearly £79 a barrel yesterday for the first time since the end of January. European leading indicators are back in the green and Wall Street futures losses have narrowed. It doesn't take much to be happy in a context where bad news is flying thick and fast.

A somewhat trivial view, I admit, is to contrast these two weeks of supposed respite with the barrage of bad news at the moment: international trade on high alert, the Fed's gloomy forecasts for the US economy, the sword of Damocles hanging over us in the form of customs duties, and the management of US debt.

In the meantime, Asia-Pacific markets ended the week on a mixed note. Australia, Taiwan and Japan are down moderately, while India and South Korea are up quite significantly. Hong Kong is rebounding by about 1% after three sessions in the red. Europe should see a technical rebound after yesterday's turmoil, pending Wall Street's return to the fray.

Today's economic highlights:

On today's agenda: business confidence and wages in France; retail sales excluding auto fuel in the United Kingdom; M3 money supply in the eurozone; in the United States, the Philadelphia Fed business outlook and the leading index. See the full calendar here.

  • GBP / USD: US$1.35
  • Gold: US$3,347.6
  • Crude Oil (BRENT): US$76.76
  • United States 10 years: 4.39%
  • BITCOIN: US$104,667

In corporate news:

  • GXO Logistics has successfully concluded the UK regulatory review process for its acquisition of Wincanton.
  • Angus Energy CEO has resigned from his position effective immediately.
  • NAHL Group PLC was unable to complete the sale of its critical care business, Bush & Co.
  • BayWa has received UK government consent for a 140 MW solar farm in South Derbyshire, England.
  • UniCredit faces uncertainty in its potential acquisition of Banco BPM due to government-imposed conditions.
  • ArcelorMittal has canceled plans to convert its German steel plants to green production due to high energy costs.
  • Google faces a $4.74 billion antitrust fine in the EU while enhancing its AI video generator technology with YouTube.
  • Sanofi and Regeneron's Dupixent has received FDA approval for the treatment of bullous pemphigoid in the US.
  • Fox Corporation has expanded its sports broadcasting presence in Mexico by acquiring Caliente TV.

See more news from UK listed companies here

Analyst Recommendations:

  • Barclays Plc: Deutsche Bank maintains its buy recommendation with a price target raised from 370 to GBX 380.
  • Lloyds Banking Group Plc: Deutsche Bank maintains its buy recommendation and raises the target price from GBX 88 to GBX 90.
  • Standard Chartered Plc: Deutsche Bank maintains its hold recommendation with a price target raised from 970 to GBX 1200.
  • Paragon Banking Group Plc: Deutsche Bank upgrades to buy from hold with a target price raised from GBX 890 to GBX 1050.
  • Hiscox Ltd: Barclays upgrades to overweight from equalweight with a price target raised from GBP 11.80 to GBP 14.
  • Hays Plc: Deutsche Bank maintains its buy recommendation and reduces the target price from GBX 110 to GBX 100.
  • Rio Tinto Plc: Citigroup remains neutral recommendation with a price target reduced from GBP 54 to GBP 46.
  • Whitbread Plc: Jefferies maintains its buy recommendation and reduces the target price from 32 to GBP 31.
  • Sage Group Plc: Goldman Sachs maintains its neutral recommendation with a price target reduced from 1380 to GBX 1370.
  • Deliveroo Plc: BNP Paribas Exane downgrades to neutral from outperform with a price target raised from GBX 170 to GBX 180.