Speeches by senior UK and European central bank officials will be in focus in today’s London market, while the direction of oil prices will also be closely watched alongside the euro and pound. Oil prices are expected to fluctuate amid concerns related to Iran and changing supply-demand outlooks.
In today’s London market, the focus will be on whether the euro and pound can maintain their resilience at the start of the week, while markets assess speeches by senior UK and European central bank officials. Oil prices have fallen on expectations that the possibility of another US attack on Iran has receded, and risk aversion has eased alongside higher stock prices.
The backdrop includes President Trump’s indication that further attacks are extremely unlikely and the decline of more than 4% in WTI futures on the 9th, which reached their lowest level since late August. Greater political stability following the midterm elections is supporting lower oil prices, while falling energy prices may ease inflationary pressures in Europe.
At the same time, distrust remains in negotiations between the United States and Iran, and geopolitical risks remain high, including comments by international relations official Araghchi and damage to a Saudi Aramco facility. The possibility of a sharp rebound in oil prices therefore remains.
Changes in expectations for additional rate hikes will be closely watched in speeches by Bank of England and ECB officials, with the key issue being how views on monetary tightening driven by higher energy prices change. Speeches later tonight are also expected to provide market clues.