From 3h
ago
07.46 GMT
Middle
East conflict 'spooking the markets' as gas and oil prices jump
This
morning’s surge in oil and gas prices, and the slowdown in UK wage growth, are
the main things to watch in the markets today, reports Kathleen Brooks,
research director at XTB:
Brent
crude has hit $113 a barrel, one of its highest levels since the conflict
began. The escalation in the conflict is spooking the market and futures
markets are predicting hefty losses for stocks at the open, as risk sentiment
sours. Oil is driving the bus in this market, and where it goes, risk sentiment
will follow.
Nat gas
prices are surging once more and are higher by 30% after the attacks on Qatar’s
Ras Laffan gas field. This has caused President Donald Trump to call on Israel
and Iran to stop targeting energy sites. However, it will take a lot of
positive sentiment and news flow to calm energy prices today.
The UK
labour market data was not as bad as feared, the unemployment rate remained
steady at 5.2%, and the UK’s labour market was little changed at the start of
the year.
There are
signs that businesses are hiring once more, the ONS has reported an increase of
6,000 payrolled workers in January and estimates a further 20,000 payrolled
workers were added in February. The vacancy rate is stable, with declines in
smaller firms offset by increases in jobs in larger firms. This suggests that
the jobs outlook improved at the start of the year compared to the end of 2025.
The big
news is that UK wages retreated to their lowest level in 5 years, with pay
growth slowing in both the private and public sectors. This is one bright spot
in an otherwise weak outlook for UK inflation. Today’s data continues to
support a BOE who is concerned about the outlook for growth. The Middle East
conflict continues to dominate, and it will take a major deescalation at this
stage to boost market sentiment and bring down energy prices.
10m ago
10.44 GMT
Losses
across European markets
European
stock markets are down across the board this morning.
Germany’s
DAX has dropped by 2.3%, France’s CAC 40 is down 1.7% and Italy’s FTSE Mib and
Spain’s IBEX have both lost 2.2%.
The UK’s
FTSE 100 is little better – now down 1.9% at 10,109 points (-196 points today)
Raffi
Boyadjian, lead market analyst at XM, says:
The brief
spout of optimism earlier in the week has dissipated as the conflict in the
Middle East shows no sign of easing, while the gatherings of the world’s most
important central banks have shunned the spotlight on the fresh inflation
threat facing the global economy.
The
overriding trend of higher energy prices and tighter monetary policy is making
its mark again on the markets, with risk assets crumbling and gold succumbing
to the US dollar’s strength, as investors struggle to see an end to the war.
Israel
struck Iran’s South Pars gas field on Wednesday, which is the world’s largest
natural gas field, triggering an angry retaliation by Tehran. Qatar’s Ras
Laffan Industrial City – the largest LNG plant in the world – came under attack
again, prompting an intervention by the US President.
Posting
on his Truth Social platform, Trump attempted to diffuse the situation by
distancing the US from Israel’s actions, saying America was unaware of those
plans and that “no more attacks will be made by Israel” on South Pars. However,
he also warned Tehran that any new strikes on Qatar’s LNG facility would be met
by a strong response.
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