20th Aug 2026 06:58
(Alliance News) - Stocks in London are set to open marginally higher on Thursday as investors weigh escalating US pressure on Iran, while digesting Federal Reserve minutes and mounting US debt.
IG says futures indicate the FTSE 100 to open up 6.3 points, 0.1%, at 10,749.65 on Thursday. The index of London large-caps closed up 0.1% at 10,743.35 on Wednesday.
Sterling was quoted at USD1.3602 early Thursday, slightly lower than USD1.3608 at the London equities close on Wednesday. Against the euro, sterling fell to EUR1.1654 from EUR1.1669 a day prior.
The euro traded at USD1.1671 early Thursday, higher than USD1.1662 late Wednesday. Against the yen, the dollar was quoted at JPY158.72 versus JPY158.46.
Progress towards ending the US war with Iran appeared to stall, as US President Donald Trump vowed to launch what he described as the toughest economic campaign yet against Tehran, threatening "tremendous" punishment for any country that helps or trades with the Islamic republic.
The renewed pressure comes as the conflict nears its sixth month, with no clear diplomatic or military breakthrough in sight and the Strait of Hormuz still heavily disrupted.
"Today, I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY! This will be Economic Warfare and Isolation on an unprecedented scale," Trump wrote on Truth Social.
He did not specify what penalties other countries could face, although Treasury Secretary Scott Bessent said last week Washington would intensify efforts to isolate Iran economically alongside its naval blockade.
Brent oil was trading at USD91.88 a barrel early Thursday, lower than USD92.40 late Wednesday.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all rising 0.2%.
US government debt topped USD40 trillion for the first time, according to Treasury Department data, surpassing earlier official forecasts as borrowing continued to accelerate.
Total public debt outstanding stood at USD40.05 trillion at the close of business on Tuesday, well above the Congressional Budget Office's previous projection that debt would reach USD39.4 trillion only by the end of fiscal 2026.
Meanwhile, minutes from the Federal Reserve's July meeting showed policymakers remained concerned about persistent inflation, with many indicating further monetary tightening could still be required.
The minutes revealed that "many participants" believed higher interest rates would likely be needed if inflation failed to ease, while others preferred to wait for more data before deciding whether additional tightening would be warranted.
In Asia on Thursday, the Nikkei 225 index in Tokyo rose 1.3%. In China, the Shanghai Composite gained 0.2%, while the Hang Seng index in Hong Kong climbed 1.2%.
The S&P/ASX 200 in Sydney added 0.2%, despite Australian unemployment rising in July.
According to the Australian Bureau of Statistics, the seasonally adjusted unemployment rate increased to 4.5% from 4.4% in June, above the FXStreet-cited consensus forecast of 4.4%.
Gold was quoted at USD4,479.41 an ounce early Thursday, slightly lower than USD4,483.13 on Wednesday.
Back in the UK, consumer sentiment improved in August following the arrival of a new prime minister, according to the British Retail Consortium-Opinium consumer sentiment monitor.
Expectations for the UK economy over the next three months improved to minus 28 points from minus 36 in July. Expectations for personal finances rose to minus 9 from minus 12, while expectations for overall personal spending increased to plus 15 from plus 13. Expectations for retail spending improved to plus 8 from plus 1, although expectations for personal savings edged down to minus 5 from minus 4.
In Thursday's corporate calendar, Hays reports full-year results, while JD Sports Fashion issues a trading statement.
In the economic calendar on Thursday, Germany releases producer price data, Switzerland publishes trade figures, the eurozone reports construction output, the US releases weekly jobless claims, and Canada publishes producer price inflation.
By Eva Castanedo, Alliance News senior economics reporter
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