Market Overview

At 07:51 ET (11:51 GMT) the FTSE 100 was down 0.25%, erasing an early‑session gain, while Germany’s DAX rose 0.58% and France’s CAC 40 edged up 0.05%. The British pound edged higher by 0.06% to $1.3354. U.S. markets were closed for the Independence Day holiday, leaving European liquidity thin.

UK Services Sector Weakness

The S&P Global UK Services PMI fell to 48.8 in June from 49.3 in May, marking the weakest reading since January 2023 and remaining below the 50‑point expansion threshold for a second consecutive month. New orders declined for a fourth straight month at the sharpest pace in over three‑and‑a‑half years, with firms citing the Middle East conflict, domestic political uncertainty and squeezed consumer budgets as key pressures. Tim Moore, Economics Director at S&P Global Market Intelligence, said the data “confirmed a clear loss of momentum for the UK economy during the second quarter of 2026.” The broader UK Composite PMI also slipped to 49.3 from 49.7, its lowest level since April 2025.

US Labour Market Data

U.S. non‑farm payrolls for June were reported at 57,000, roughly half of the 113,000 jobs forecast, prompting markets to trim expectations of further Federal Reserve rate hikes.

Geopolitical and Regional Updates

U.S.–Iran peace talks remain suspended due to the funeral of former Supreme Leader Ayatollah Ali Khamenei, whose body arrived in Tehran’s Grand Mosalla early Friday. Ceremonies are scheduled for July 4‑9, with 15‑20 million mourners expected. Revolutionary Guard chief Gen. Ahmad Vahidi made his first public appearance since February 8. Strait of Hormuz ship traffic recovered to 258 vessels last week from 138 previously, but remains well below pre‑war daily levels.

Domestic Political Commentary

Prime minister‑in‑waiting Andy Burnham told LBC he would raise business rates on large out‑of‑town warehouses to fund a 20% rate cut for high‑street retailers, pledging to honour Labour’s manifesto on income tax, VAT and national insurance.

Commodity and Currency Movements

Brent crude slipped 0.21% to $71.65 a barrel and WTI fell 0.44% to $68.39, extending earlier losses. Gold futures rose 1.71% to $4,196.09 an ounce and spot gold increased 1.46% to $4,184.15, supported by the dollar’s retreat after weak U.S. payrolls and net central‑bank buying of 41 tonnes in May.

Currency

The British pound edged up 0.06% against the U.S. dollar, trading at $1.3354.