14th Sep 2026 06:58
(Alliance News) - The FTSE 100 is to open higher on Monday, though European peers are to decline, as oil prices register another surge.
"Oil prices are rising again on news of the shutdown of Saudi Arabia's East-West pipeline following drone strikes, and the Houthis' seizure of strategic locations on the Red Sea coast," Rabobank analysts commented.
"Geopolitical friction remains at the forefront of investor concerns as the Middle East and Eastern Europe simmer away."
Meanwhile, Andy Burnham will call for a "culture shift" as he gathers business leaders in Downing Street on Monday to pledge to back entrepreneurs.
The UK prime minister is expected to host a series of events in No 10 aimed at pitching his government as a "partner for growth" that can offer a stable platform for investment in the UK.
Attendees are expected to include the bosses of HSBC, Rolls-Royce, Morrisons, BAE Systems and Shell.
IG says futures indicate the FTSE 100 to open 17.0 points higher, 0.2%, at 10,667.44 on Monday. The index of London large-caps ended up 41.52 points, 0.4%, at 10,650.44 on Friday. Nonetheless, the large-cap benchmark fell 1.7% over the course of last week. It was its worst week since July.
Against the dollar, the pound traded at USD1.3505 early Monday, down from USD1.3523 at the London equities close on Friday, while against the euro, it rose to EUR1.1668 from EUR1.1648.
The euro declined to USD1.1569 early Monday from USD1.1605 on Friday. Against the yen, the buck rose to JPY153.99 from JPY153.58.
The yield on the US 10-year Treasury widened to 4.96% on Monday from 4.93% at the time of the closing bell on the London Stock Exchange on Friday. The 30-year widened to 5.36% from 5.32%.
A barrel of Brent fetched USD107.12 on Monday morning, surging from USD104.73 late Friday afternoon.
Saudi authorities said Friday drones launched from Iraq led to the temporary closure of a crucial oil export route used to bypass the lockdown of the Strait of Hormuz.
Riyadh has increased its use of the East-West pipeline, which links Abqaiq, near the Gulf, to the port of Yanbu on the Red Sea, since the start of the Middle East war to bypass the closure of the Strait of Hormuz by Iran.
The Saudi foreign ministry condemned "the targeting of the East–West pipeline in the Riyadh and Medina regions by several drones coming from Iraq, which caused human injuries and damage".
In Tokyo on Monday, the Nikkei 225 was down 1.1%. In China, the Shanghai Composite was 0.1% lower, while the Hang Seng Index in Hong Kong added 0.5%. Sydney's S&P/ASX 200 was up 0.1%.
Focus this week is on a trio of rate decisions, analysts at Brown Brothers Harriman note.
"The FOMC is poised to deliver a 25bps hike to a target range of 3.75%-4.00% on Wednesday after five straight holds, marking its first hike since July 2023. Persistently above target US inflation and a stable labour market justify a rate increase," BBH analysts commented.
"The Bank of Japan is widely expected to raise the policy rate 25bps to 1.25% on Friday after pausing in July. Japan underlying inflation is very close to the 2% target and the economy is running slightly above capacity. A 50bps hike cannot be ruled out as it would help contain inflation expectations, and cap longer term Japanese government bond yields."
The Bank of England is expected to leave rates unmoved.
Gold declined to USD4,332.73 an ounce early Monday, from USD4,375.02 late Friday afternoon.
Monday's local corporate calendar has half-year results from investment trust HgCapital Trust.
By Eric Cunha, Alliance News news editor
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