11th Aug 2026 06:52
(Alliance News) - Stocks in London are set to open slightly lower on Tuesday, as Middle East worries continued to weigh on enthusiasm and send oil higher.
"The war has changed form, not necessarily ended. Trump's pivot toward sanctions, tanker pressure and economic warfare may reduce immediate military risk, but it leaves Hormuz unresolved and keeps oil firmly on the battlefield," Quintex Intel analyst Stephen Innes commented.
"Iran does not need talks to fail. It may only need them to drag. Higher crude, tighter shipping and the threat of physical shortages can do some of Tehran's negotiating work without another missile being fired."
IG says futures indicate the FTSE 100 to open down 7.3 points, 0.1%, at 10,855.20 on Tuesday. The index of London large-caps closed down 38.59 points, 0.4%, at 10,862.50 on Monday.
A barrel of Brent rose to USD87.99 on Tuesday morning, from USD86.35 at the time of the London equities close on Monday.
US President Donald Trump said Monday he would seek conflict compensation from Iran as part of any peace negotiations, citing attacks and killings stretching back decades allegedly backed or perpetrated by Tehran.
Negotiations on ending the war and reopening the Strait of Hormuz have stalled, and his new demands risk putting a quick agreement further out of reach.
Trump's announcement was a direct response to Iran's insistence that US payment of war reparations are a pre-condition to any resolution of the ongoing hostilities.
The pound ebbed to USD1.3511 on Tuesday, from USD1.3522 late Monday. Against the euro, it fell to EUR1.1702 from EUR1.1708. The euro faded to USD1.1541 from USD1.1549. Against the yen, the buck rose to JPY159.19 from JPY158.92.
Commerzbank analyst Volkmar Baur commented: "The Japanese yen rose above 159 against the US dollar again yesterday, indicating that it has weakened once more in recent days. This was to be expected. Following the Bank of Japan's meeting, we had already noted that the Bank of Japan would need to send clearer signals that it is considering raising interest rates more quickly than it has so far. Governor Ueda did give subtle signals during his press conference. And the "summary of opinions" released yesterday also contains indications that the bank could raise interest rates more quickly. However, the market still seems to find this somewhat insufficient.
"We remain convinced that the Japanese yen is currently trading too weakly and should be somewhat stronger on a fundamental basis. This was evident again yesterday in robust figures for the current account and credit growth. At the same time, days like yesterday show that rising stock prices can contribute to a weakening of the currency."
The yield on the 10-year US Treasury widened to 4.71% early Tuesday from 4.70% on Monday. The 30-year yield stretched to 5.25% from 5.24%.
Gold climbed to USD4,378.61 an ounce early on Tuesday, from USD4,350.91 late Monday afternoon.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.1%, the S&P 500 down 0.1% and the Nasdaq Composite down 0.3%.
Sydney's S&P/ASX 200 was up 0.4% on Tuesday.
The Reserve Bank of Australia on Tuesday decided to leave its cash rate target unchanged following its August meeting.
The nine-member monetary policy board voted unanimously to maintain its policy rate at 4.35% in August, matching the consensus forecast cited by FXStreet.
"Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of the increase reflected greater capacity pressures. While the impact of the Middle East conflict on inflation has so far been less than expected, headline inflation is still too high," the MPB said in a statement.
The MPB also noted that firms experience cost pressures and increase the prices of their goods and services.
"There are signs that consumer spending growth is slowing gradually as expected, while growth in business debt and investment is strong. Momentum in the housing market has shifted, with housing prices falling in some capital cities and new housing loans declining noticeably.
"Labour market conditions have eased by a little more than expected in recent months. Labour market leading indicators point to only limited easing in the near term," the MPB added.
The MPB said the decision to hold was an opportunity to assess how the economy is evolving. It added that financial conditions are tighter now after three increases in the cash rate target since the beginning of the year.
In China, the Shanghai Composite was down 0.2%, while the Hang Seng Index in Hong Kong shed 0.7%. Financial markets in Tokyo are closed on Tuesday for Mountain Day.
Tuesday's UK corporate calendar has half-year results from Holiday Inn owner InterContinental Hotels Group and a trading update from housebuilder Bellway.
By Eric Cunha, Alliance News news editor
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