Market Overview
At 03:30 ET (07:30 GMT) on Friday, the FTSE 100 rose 0.22%, while Germany’s DAX gained 0.33% and France’s CAC 40 advanced 0.26%. The British pound slipped 0.07% against the U.S. dollar, with GBP/USD trading at 1.3449.
Oil and Shipping Disruptions
Gulf shipping disruptions continued to underpin oil prices. Kpler data cited by Reuters showed only 33 vessels transited the Strait of Hormuz between Monday and Thursday, down from 50 the previous week, and just six crude tankers exited the strait this week. In contrast, traffic through the Bab al‑Mandeb route rose to 26 vessels on Thursday, suggesting some rerouting of shipments. Explosions near Qeshm Island on Thursday night, which Iran’s semi‑official Fars news agency linked to reported strikes, had pushed Brent crude up nearly 4% in the prior session; Brent closed Friday up another 0.70% at $83.08 per barrel, while U.S. WTI rose 0.36% to $77.57.
Mortgage Market Update
Lloyds Banking Group’s House Price Index reported that UK house prices were flat in July (0.0% month‑on‑month) after a 0.2% rise in June, with the average property price standing at £299,253. Annual growth slowed to 0.1%, the weakest pace since November 2023. Amanda Bryden, Head of Mortgages at Lloyds, said the UK housing market remained steady in July and that mortgage rates “have edged higher again after easing earlier in the summer” following the Middle East escalation.
Analyst Commentary
Mohit Kumar, an analyst at Jefferies, warned that markets could become desensitized to Middle‑East developments as long as oil stays below $80 per barrel, noting that broader fundamentals remain solid with a resilient U.S. labour market and ample global liquidity. He identified 10‑year U.S. Treasury yields near 4.70% as the “biggest worry” and pointed out that oil priced at $75‑$80 remains 25‑30% above pre‑war levels, a level that could “feed into inflation globally.” Kumar also said an Iran‑Oman agreement on Strait of Hormuz passage is unlikely to satisfy Washington because it would effectively cede Iran control over the waterway, and reports that Tehran wants to bar U.S. and Israeli vessels suggest a deal remains distant.
Geopolitical Context
Reuters reported that the United States may need to compromise with Tehran to reopen Hormuz, but the U.S. rejects any arrangement that gives Iran control or fee‑collection rights. Iranian Parliament Speaker Mohammad Bagher Ghalibaf accused Washington of “theater diplomacy” on X. U.S. President Donald Trump acknowledged that some U.S. munitions stockpiles were “a little bit tighter” than others, pushing back on reports that the five‑month war had severely depleted supplies; the White House denied that Trump had pressed Defence Secretary Pete Hegseth on the issue.
Commodity and Safe‑Haven Prices
Gold futures rose 1.04% to $4,345.47, while spot gold gained 1.1% to $4,286.50, reflecting safe‑haven demand amid the geopolitical backdrop.
Other UK Corporate News
In related UK market news, JD Sports announced the appointment of former IKEA CEO Peter Agnefjäll as chair effective 1 September, and Goodwin is reported to be in talks to sell its defence business after order delays, according to the Financial Times.