Morning Note: A Round-up of Global Financial Market News.

Market News

Stocks trimmed gains and Brent Crude advanced to $98 a barrel after US strikes on sites in Iran. American forces hit missile launch sites and boats trying to place mines, the US Central Command said. Authorities described the attacks as defensive in nature. The strikes curbed optimism over a potential deal to end the war as delegations arrive in Qatar for peace negotiations.

Russian Foreign Minister Sergei Lavrov advised US Secretary of State Marco Rubio to evacuate American citizens and diplomats from Kyiv, as the Kremlin plans to continue heavy strikes on the Ukrainian capital.

The dollar strengthened against all of its Group-of-10 peers, while gold erased earlier gains to fall 1% to about $4,525 an ounce. The yield on the US 10-year Treasury is 4.50%.

US equities were closed for the Memorial Day holiday yesterday and are currently expected to trade slightly down at the open this afternoon. After strong gains yesterday, Asian equities pared earlier advances this morning: Nikkei 225 (-0.3%); Hang Seng (+0.3%); Shanghai Composite (-0.2%).

The FTSE 100 is currently 0.2% lower at 10,540. Shares in GKN Aerospace owner Melrose Industries are down 5% after an overheating chemical tank at its Garden Grove facility in California triggered an emergency response and evacuation orders over the weekend. Kingfisher is trading 4% higher as the owner of B&Q reiterated its full-year guidance despite the soft market backdrop.

The UK 10-year gilt yield dropped to 4.83%, the lowest level since 21 April, after the sharpest weekly decline since 2024, as investors trimmed Bank of England rate hike expectations amid weak economic data. Bank lending to UK businesses falls to lowest level in nearly 30 years.  Sterling trades at $1.3470 and €1.1585.

Source: Bloomberg