Introduction: Brent crude oil back over $100
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The dust is settling in the markets after a classic roller-coaster session yesterday, when hopes of de-escalation in the Middle East drove up shares and hit oil.
Yesterday’s equity rally was driven by Donald Trump appearing to blink first in the Iranian war, by claiming “very good” talks had taken place with Tehran and postponing any attacks on Iran’s energy infrastructure for five days.
That was enough to pull European markets out of a nosedive, while the US Dow Jones Industrial Average recorded its strongest daily rise in six weeks. Oil slumped 10%,
But…that optimism may fade, as Iran dismisses Trump’s claim of talks; the Islamic Revolutionary Guards Corps (IRGC) called Trump’s words “psychological operations” that had no impact on Tehran’s fight, while parliamentary speaker Mohammad Baqer Qalibaf said it was “fake news … used to manipulate the financial and oil markets”.
And today, oil is rising again, back over the $100 mark. Brent crude has risen by 2.5% to $102.51 a barrel, as the conflict continues.
Although Trump’s claims have defused some tension, the underlying situation remains “incredibly fragile”, points out Tony Sycamore, market analyst at IG:
Iran initially denied any knowledge of the talks, although reports suggest the US administration may have identified a potential new negotiating partner open to a ceasefire. However, some of this optimism has been overshadowed this morning by fresh reports of US and Israeli strikes on energy-related buildings in Iran’s Isfahan region, which has seen [US] crude oil bounce 3% to $91.53.
Presumably, these latest strikes are designed to get all of Iran’s new leadership group on the same ceasefire page ahead of Trump’s revised deadline for Iran to reopen the Strait of Hormuz, which is now set for Friday. Crucially, this deadline coincides with the expected arrival of 2,200 Marines of the 31st Marine Expeditionary Unit in the Gulf Region, along with the USS Tripoli and USS New Orleans.
So far today, Asia-Pacific stock markets have risen – recovering some of their losses before Trump’s claims hit the wires. European markets are expected to drop, though, when trading begins.
New surveys of purchasing managers around the world will also show the impact of the conflict, and the surge in energy prices, on the global economy.
The agenda
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9am GMT: Eurozone flash PMI report for March
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9.30am GMT: UK PMI report for March
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9.30am GMT: The Science, Innovation and Technology Committee will question senior representatives of Google, TikTok, X and Meta
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1.30pm: Bank of England chief economist Huw Pill speech at central banking conference in North Macedonia
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2.30pm GMT: Business and Trade committee hearing on Royal Mail
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2.45pm GMT: US PMI report for March
Key events
FTSE 100 opens higher
Britain’s stock market has opened higher this morning, as investors try to keep yesterday’s Iran relief rally running.
The FTSE 100 share index is up 39 points, or 0.4%, at 9,933 points this morning, a day after it recovered from an early 2.5% tumble.
But mining companies, housebuilders, and defence companies are lower.
UK crackdown on late payments
Phillip Inman
Small businesses can appeal against clients that refuse to pay their bills on time under new rules being brought in by the UK business minister, as part of a package of measures to support faster payments across the economy.
Business minister Peter Kyle said he was implementing “the largest set of reforms in over a generation” by giving powers to the small business commissioner to intervene in disputes and issue millions of pounds worth of fines against the worst offenders.
Reasearch carried out last year by the department of business and trade found that while 8% of businesses said late payments were a “big problem” costing UK firms directly about £7bn a year, 15% of businesses said they avoided doing business with specific customers due to poor payment practices in the previous year.
The department has put the overall cost to the economy at £11bn a year.
Kyle will speak in London this afternoon at the Fast Payer Code awards, which will reward companies for making timely payments for goods and services.
He will describe the measures as the toughest in the G7 in an effort to prevent about 38 businesses from shutting their doors each day – the equivalent of 266 a week.
The rules will include a new 60-day cap on payment terms on all large firms when paying smaller suppliers. Mandatory interest on late payments will also be introduced, with a requirement for all commercial contracts to include statutory interest set at 8% above the Bank of England base rate.
Emma Jones, the small business commissioner will be in the front line, investigating and judging wrongdoing. She said:
“These reforms will reduce the hours spent chasing debt allowing small businesses to focus on more productive and enjoyable growth.”
UK energy minister urges drivers not to change behaviour
The UK’s energy minister has urged motorists not to drive slower nor buy fuel differently because of the Iran oil crisis, insisting there was no need to change their behaviour.
Michael Shanks was asked by Times Radio if drivers should change their habits as a result of the oil restrictions caused by the conflict in the Middle East.
He told the broadcaster:
“They should do everything as absolutely normal because there is no shortage of fuel anywhere in the country at the moment. We monitor this every single day, I look at the numbers personally. There’s no issue at all with that.”
Mr Shanks added thatpeople shouldn’t change their behaviour or their habits in the slightest, saying:
“People should go about their business as normal. That’s what the RAC and the AA have said. It’s really important people do that.
“There’s no shortage of fuel and everything is working as normal.”
Asia-Pacific markets post gains despite Iranian denials
Despite Iran disputing Donald Trump’s claims about constructive talks taking place, most Asia-Pacific markets have posted gains today.
After days of mounting fear and dispair about the Middle East conflict, investors in Tokyo, Seoul and Shanghai are in more hopeful mood today.
Japan’s Nikkei has risen by 2.1%, while South Korea’s Kospi is up 2.8% and China’s CSI 300 gained 1.3%.
Emma Wall, chief investment strategist, Hargreaves Lansdown:
“According to President Donald Trump, preliminary truce talks have begun with Iran. According to Iran, he’s living in la-la-land and the talks never happened. But the markets love hope, and the prospect of a ceasefire was enough to push Brent crude oil down 11% yesterday to below $100 a barrel for the first time in weeks. But the Iran denial, and a report that the UAE and Saudi Arabia are considering entering the war, has sent oil back up to $103.
It’s foreign-policy-by-soundbite, but it is President Trump’s speciality. Announcing plans to extend the previous 48-hour deadline to open the Strait of Hormuz, or else, by five days, he sent a clear signal to the market that the US is ready to make a deal. Just a couple of days earlier, Trump had outlined plans to target Iran’s power plants, and Iran in turn had threatened energy and water infrastructure across the Middle East.
Deutsche Bank: some nervousness has crept back into the market
“Some nervousness” has crept back into the markets today, after yesterday’s relief rally, reports Jim Reid of Deutsche Bank.
He points out that the interest rate on US government debt (10-year Treasury bonds) has risen, while stock market futures in the US and Europe are lower:
Obviously much now depends on the progress of any talks, and whether the more optimistic rhetoric is followed up by concrete action. Indeed, Iranian officials have repeatedly denied that talks with the US were even happening, which had contributed to markets reversing some of the initial risk-on reaction late yesterday and overnight.
Brent crude has edged back up nearly 4 percent to $103.88/bbl this morning, with futures on the S&P 500 (-0.69%) and STOXX 50 (-0.84%) notably lower. 10yr USTs are +3.8bps at 4.38%. So some nervousness has crept back in.
The WSJ last night reported that Saudi Arabia and the UAE were considering joining the war against Iran which hasn’t helped sentiment.
Introduction: Brent crude oil back over $100
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The dust is settling in the markets after a classic roller-coaster session yesterday, when hopes of de-escalation in the Middle East drove up shares and hit oil.
Yesterday’s equity rally was driven by Donald Trump appearing to blink first in the Iranian war, by claiming “very good” talks had taken place with Tehran and postponing any attacks on Iran’s energy infrastructure for five days.
That was enough to pull European markets out of a nosedive, while the US Dow Jones Industrial Average recorded its strongest daily rise in six weeks. Oil slumped 10%,
But…that optimism may fade, as Iran dismisses Trump’s claim of talks; the Islamic Revolutionary Guards Corps (IRGC) called Trump’s words “psychological operations” that had no impact on Tehran’s fight, while parliamentary speaker Mohammad Baqer Qalibaf said it was “fake news … used to manipulate the financial and oil markets”.
And today, oil is rising again, back over the $100 mark. Brent crude has risen by 2.5% to $102.51 a barrel, as the conflict continues.
Although Trump’s claims have defused some tension, the underlying situation remains “incredibly fragile”, points out Tony Sycamore, market analyst at IG:
Iran initially denied any knowledge of the talks, although reports suggest the US administration may have identified a potential new negotiating partner open to a ceasefire. However, some of this optimism has been overshadowed this morning by fresh reports of US and Israeli strikes on energy-related buildings in Iran’s Isfahan region, which has seen [US] crude oil bounce 3% to $91.53.
Presumably, these latest strikes are designed to get all of Iran’s new leadership group on the same ceasefire page ahead of Trump’s revised deadline for Iran to reopen the Strait of Hormuz, which is now set for Friday. Crucially, this deadline coincides with the expected arrival of 2,200 Marines of the 31st Marine Expeditionary Unit in the Gulf Region, along with the USS Tripoli and USS New Orleans.
So far today, Asia-Pacific stock markets have risen – recovering some of their losses before Trump’s claims hit the wires. European markets are expected to drop, though, when trading begins.
New surveys of purchasing managers around the world will also show the impact of the conflict, and the surge in energy prices, on the global economy.
The agenda
-
9am GMT: Eurozone flash PMI report for March
-
9.30am GMT: UK PMI report for March
-
9.30am GMT: The Science, Innovation and Technology Committee will question senior representatives of Google, TikTok, X and Meta
-
1.30pm: Bank of England chief economist Huw Pill speech at central banking conference in North Macedonia
-
2.30pm GMT: Business and Trade committee hearing on Royal Mail
-
2.45pm GMT: US PMI report for March
