As I have done every morning for the past month, my routine starts with checking the oil price. It offers a useful gauge of what may have been said and done overnight. This morning, Brent crude stands at $107 per barrel, slightly higher than 24 hours ago. Even so, many media outlets are reporting a rebound in Wall Street's forward indicators following remarks by Donald Trump, alongside claims that oil is "falling" this morning. In reality, oil has edged down, but not by much.

What happened in the meantime? After threatening to unleash hell on Iran should Tehran refuse to negotiate a ceasefire, Donald Trump reverted to his usual tactic: stepping back while granting additional time to reach a compromise. Iran confirmed during the day that talks had begun. Local authorities, whose precise identity has become somewhat unclear, submitted a counterproposal after receiving a US draft earlier in the week. Tehran is notably seeking assurances that the United States and Israel will halt their strikes, recognition of its authority over the Strait of Hormuz, and compensation for war damage. The ball now appears to be in the Western camp.

For now, the conflict is economically lose-lose in the short term, even if the reality is more nuanced. In any case, to quote AlphaValue, "a curious consensus has emerged regarding Donald Trump's administration. The campaign is seen as a tactical success, largely achieved through air superiority, but as a strategic failure. Iran may be weakened in conventional terms, but it is likely able to extract greater long-term value from its geographical advantage." Indeed, Tehran has effectively tightened its grip on Hormuz in a manner the regime would likely never have attempted absent this conflict. The country could even derive substantial revenues from it, with a permanent transit toll reportedly part of the negotiations.

The latest announcements from the White House came after a volatile trading session on Wall Street. The Nasdaq 100 fell sharply by 2.5%, dragged down by Meta's slump of 8% after losing two major liability cases related to the impact of social media on younger users. Other social platforms followed suit, as did, by extension, the broader AI-linked segment. Nvidia dropped 4.2%, Micron 7% and Applied Materials 8.3%. This marks a self-contained downward move within a broader decline tied to oil. The Dow Jones, far less exposed to technology, fared better with a 1% decline. Earlier in Europe, indices had already come under pressure: the STOXX Europe 600 fell 1.1%, the CAC 40 1%, and the DAX 1.5%. The STOXX Europe 600 has lost 8.3% since the attack on Iran. The S&P 500 is down 6.25%, while the MSCI World index shows a decline of 7.1%.

The limited downside reaction in oil prices to the latest ceasefire-related announcements suggests that Donald Trump's rhetoric is carrying less weight than before. These are more challenging times for proponents of the TACO Trade, a strategy that involves buying high-beta equities as the US President approaches the point at which he is expected to reverse course. The mechanism appears to be losing traction. While a deal will likely be reached eventually, oil is set to retain a significant risk premium for some time, which is hardly helpful for most of the world's economies. The White House has switched to MOCA mode: Make Oil Cheap Again.

Among notable corporate developments, there is movement in the spirits sector, which has been under strain for months amid shifting consumption patterns. Such conditions tend to favour consolidation. This may well be the case between France's Pernod Ricard and the US-based Brown-Forman, best known for its Tennessee whiskey Jack Daniel's. Both companies have confirmed they are in talks following a leak reported by Bloomberg. On the macro front, the University of Michigan's US consumer confidence index, due this afternoon, will provide a snapshot of sentiment after a month of conflict in the Middle East.

In Asia-Pacific, Japan and South Korea failed to rebound and ended the session slightly lower. India fell 1.6% after a public holiday, while Australia slipped 0.1%. The broader MSCI Asia-Pacific index declined 0.35% on the day and roughly 1% over the week. Western markets are nonetheless poised to attempt a rebound in early trading, although the overall structure remains fragile.

Today's economic highlights:

On today's agenda: Gfk Consumer Confidence and Retail Sales in the United Kingdom; in Spain, preliminary annual and monthly inflation rates; in France, unemployment benefit claims; in the United States, retail inventories excluding autos, wholesale inventories, the University of Michigan consumer sentiment, and Fed Daly's speech. See the full calendar here.

  • GBP / USD: US$1.33
  • Gold: US$4,460.66
  • Crude Oil (BRENT): US$108.09
  • United States 10 years: 4.43%
  • BITCOIN: US$68,649.6

In corporate news:

  • Serica Energy reported a 17% drop in annual sales revenue to USD601.4 million and a halved pretax profit of USD80.3 million, while maintaining its final dividend.
  • Oxford BioMedica reported a 31% increase in 2025 revenue to GBP168.7 million but warned of a loss-making first half of 2026.
  • 3i Group announced that its investee Action plans to open its first US store by 2028, with first-quarter sales growing 15% year-on-year.
  • Associated British Foods' Primark opened its first store in Dubai and plans further Middle East expansion in 2026.
  • Next reported a 21% increase in pretax profit to GBP1.19 billion for fiscal 2026 and raised its fiscal 2027 profit guidance.
  • Glencore received EU approval for its acquisition of a 70% stake in FincoEnergies for $145 million.
  • Playtech reported a widened annual pretax loss of EUR128.6 million and a 10% revenue decline to EUR763.6 million in 2025.
  • Pollen Street reported a 30% increase in assets under management to GBP7.1 billion and a 10% rise in pretax profit to GBP61.6 million for 2025.
  • THG narrowed its 2025 pretax loss to GBP69.4 million and expects free cash flow generation and reduced net debt in 2026.
  • Ceres Power announced a partnership with Centrica to develop solid oxide power solutions and reported a 37% revenue drop in 2025.
  • Novartis announces the acquisition of Excellergy for $2 billion.
  • The FDA approves Novo Nordisk's once-weekly insulin for type 2 diabetes.
  • UBS has suspended redemptions from its Euroinvest real estate fund for up to three years, citing a lack of liquidity, according to Reuters.
  • Unilever and Magnum Ice Cream are the subject of a defamation lawsuit filed by Anuradha Mittal, former chair of Ben & Jerry’s.
  • Indra signs a memorandum of understanding with Rheinmetall regarding military vehicle systems.
  • Eni withdraws from the Ratio-Dana consortium for offshore exploration in Israel.
  • Ferrari resumes deliveries to the Middle East after a conflict-related interruption.
  • Coca-Cola Hellenic issues €2.1 billion in bonds.
  • A subsidiary of BASF launches a placement of 60 million Harbour Energy shares.
  • Microsoft is freezing hiring in its main cloud and sales divisions, according to The Information.
  • Mastercard is considering selling a real-time payments business.
  • Apple is considering opening Siri to competing artificial intelligence systems, according to Reuters. Meanwhile, Bloomberg reports that Apple is discontinuing the Mac Pro and offering substantial bonuses to its engineers to prevent them from leaving for ChatGPT and similar platforms.

See more news from UK listed companies here

Analyst Recommendations:

  • Rentokil Initial Plc: BNP Paribas maintains its outperform rating and raises the target price from GBX 550 to GBX 560.
  • Reckitt Benckiser Group Plc: Barclays maintains its overweight recommendation and reduces the target price from GBP 70 to GBP 63.
  • Atalaya Mining Plc: Peel Hunt maintains its buy recommendation and reduces the target price from GBP 12 to GBP 11.35.
  • Travis Perkins Plc: Stifel maintains its hold recommendation and reduces the target price from GBX 700 to GBX 600.
  • Haleon Plc: Barclays maintains its overweight recommendation and reduces the target price from GBP 4.20 to GBP 4.15.
  • Diploma Plc: JP Morgan maintains its neutral recommendation and raises the target price from GBP 51.20 to GBP 57.60.
  • 3I Group Plc: Barclays maintains its overweight recommendation and reduces the target price from GBP 48.10 to GBP 44.55.
  • Derwent London Plc: Barclays upgrades to market weight from underweight and raises the target price from GBP 16.40 to GBP 17.40.
  • Greatland Gold: Macquarie upgrades to outperform from neutral with a price target raised from AUD 13.20 to AUD 13.50.
  • Easyjet Plc: UBS maintains its buy recommendation and reduces the target price from GBX 800 to GBX 700.
  • Marks & Spencer Group Plc: UBS maintains its buy recommendation and reduces the target price from GBX 435 to GBX 425.
  • Antofagasta Plc: UBS maintains its neutral recommendation and reduces the target price from GBX 4000 to GBX 3750.