UK Stocks Rise on Commodity Gains and Fitch Credit Rating
UK stocks are expected to start the week on a firmer note, with FTSE 100 futures up by 0.2% after Fitch maintained the country's credit rating at AA- and commodities like oil, gold, and copper showed gains.
The increase follows a softer close for the FTSE 100 last Friday, when big miners slid alongside a dip in copper prices. However, Fitch's decision to keep the UK's credit rating stable sends a reassuring signal that the country remains a reliable borrower.
Despite this, there are signs of a cooler economy in the UK, with property site Rightmove reporting the biggest August drop in asking prices for newly listed homes since 2018. The CIPD also found employers to be cautious about hiring.
Outside the UK, global cross-currents are setting the tone for markets today. Oil is higher as optimism about a US-Iran breakthrough fades and tanker traffic through the Strait of Hormuz slows. Gold is steadier thanks to a weaker dollar and softer US data that's reduced expectations for a near-term Federal Reserve rate hike.
Copper is also getting an extra push from tight physical supply, which has widened its futures spread to its broadest level in five years. This 'backwardation' often signals near-term scarcity, as buyers pay more for copper delivered soon than later. As a result, spot copper can stay better supported than longer-dated prices, and large miners' revenue expectations tend to get marked up first.