LONDON MARKET EARLY CALL: Stocks called lower after Trump Iran warning

(Alliance News) - Stocks in London are set to open lower at the start of the week, while Brent surged as the US president warned that Iran "better get moving" and agreed a peace deal.

IG says futures indicate the FTSE 100 to open 9.2 points lower at 10,186.17 on Monday. The index of London large-caps slumped 177.56 points, 1.7%, at 10,195.37 on Friday. For the week, the FTSE 100 fell 0.4%.

The CAC 40 in Paris and DAX 40 in Frankfurt are each called down 0.8%.

The yield on the 10-year US Treasury stretched to 4.62% on Monday from 4.58% at the time of the London equities close on Friday. The 30-year yield widened to 5.15% from 5.12%.

Sterling edged up to USD1.3324 early Monday from USD1.3319 late Friday afternoon. Against the euro, it bought EUR1.1461, largely unmoved from EUR1.1462.

The euro fell fractionally to USD1.1620 from USD1.1622. Against the yen, the dollar rose to JPY158.93 from JPY158.68.

A barrel of Brent surged to USD111.01 on Monday from USD108.83 at the time of the London equities close on Friday.

US President Donald Trump issued a fresh warning to Iran on Sunday, saying it had to move quickly towards a peace deal or "there won't be anything left of them."

Washington, locked in conflict with Tehran since US and Israeli forces launched major strikes on the Islamic republic beginning February 28, has struggled to break an impasse and make any progress toward ending a war that has shaken the Middle East and sent energy prices climbing.

"For Iran, the Clock is Ticking, and they better get moving, FAST, or there won't be anything left of them," Trump wrote on his Truth Social platform. "TIME IS OF THE ESSENCE!"

Commerzbank analyst Michael Pfister commented: "The market's recent wave of optimism that the conflict was over for good has given way to renewed concerns lately. The rumours over the weekend that Israel is preparing for a continuation of the war, Iran's statement that the US has made no significant concessions to end the war and the US president's harsher rhetoric are a reminder to all market participants that the problem has not been resolved. Even though there have been reports that Iran is working on a mechanism for passage through the Strait of Hormuz, a lasting end to the war will likely be needed to ensure safe passage."

China reported softer retail and industrial activity in April while unemployment eased, official data showed Monday.

According to the National Bureau of Statistics, the urban surveyed unemployment rate was at 5.2% in April from 5.4% in March.

Retail sales grew 0.2% year-on-year in April, missing the FXStreet-cited consensus forecast of 2.0% growth and easing from the 1.7% increase recorded in March.

Meanwhile, industrial production grew 4.1% on-year in April, below the 5.9% growth consensus and the 5.7% rise the previous month.

China reported progress in trade talks with the US following a summit between US President Trump and President Xi Jinping in Beijing.

The two sides reached preliminary agreements on tariffs, agricultural issues and aircraft, the Ministry of Commerce in Beijing said on Saturday. Further negotiations on details are under way.

According to Beijing, China and the US agreed to establish trade and investment councils.

The Trade Council will be used to discuss tariff reductions for specific products, among other things. There is general agreement on reducing tariffs on certain products to a comparable extent. Beijing also indicated progress in agricultural trade.

Beijing did not provide details about rates.

In Tokyo on Monday, the Nikkei 225 was down 0.8%. The Shanghai Composite in China was slightly higher, while the Hang Seng Index in Hong Kong was down 1.1%. The S&P/ASX 200 slumped 1.4%.

In New York on Friday, the Dow Jones Industrial Average closed down 1.1%, the S&P 500 shed 1.2% and the Nasdaq Composite declined 1.5%.

The prospect of a leadership challenge to UK Prime Minister Keir Starmer is looming closer after Andy Burnham was cleared to run for selection in the Makerfield by-election.

The Greater Manchester mayor is seeking to replace Josh Simons, who is standing down as an MP to make way for Burnham to return to Parliament.

Labour's ruling body, the National Executive Committee, has granted Burnham permission to stand in the selection process.

Applications close on Monday and the NEC will endorse a candidate on Thursday. June 18 is thought to be the earliest date a by-election could take place.

Gold fell to USD4,540.91 an ounce on Monday from USD4,544.53 late Friday afternoon.

Monday's local corporate calendar has full-year results from airline Ryanair and self-storage operator Big Yellow.

By Eric Cunha, Alliance News news editor

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