The compromise was reached despite an Israeli strike in Lebanon, which delayed the formal announcement. Donald Trump did not mince his words in an interview with Axios. I quote: "Why did Bibi have to do a f***ing attack? I was so pissed off. I let him know. He has no f***ing judgement. I let him know that," Trump said." The US president has his faults, but hiding what he thinks is not one of them.

The prospect of a breakthrough in the Middle East had already lifted financial markets late last week. It came amid the euphoria surrounding SpaceX's stock-market debut, the world's most richly valued chimera. By the end of its first trading session, Elon Musk's company was trading 19% higher at $161.11, versus an IPO price of $ 135. Its market capitalisation reached $2,107bn, instantly making it the world's sixth most valuable company, behind Amazon at $2,566bn. Musk is betting that the conquest of space will open up new economic frontiers within a timeframe that makes sense for financial investors. The market liked the trailer. The film itself will now have to deliver.

A positive end to the week allowed equity indices, which had been emerging from a consolidation phase, to chalk up weekly gains. Europe narrowed the gap with the US a little. The Stoxx Europe 600 is up 6.9% in 2026, while the S&P 500 has gained 8.6%.

Hopes of a de-escalation in Iran triggered the expected market moves. First, oil fell sharply, as supply is expected to increase again. Brent is trading at around $83 this morning, down 12% over the week and 21% over the month. Second, bonds rallied. Lower oil prices are reassuring for the inflation outlook, which in turn is pushing down rate expectations. As a reminder, bond prices and yields move in opposite directions. Finally, cyclicals and financials bounced back, as the economic outlook cleared. That also explains Europe's relative outperformance last week: the continent's indices have heavy weightings in banks and cyclical sectors such as autos, luxury goods and airlines.

This week, the spotlight will be on the US Federal Reserve's first monetary policy decision under Kevin Warsh. The prospect of an agreement with Iran should make the Fed's task easier, although it may still strike a hawkish tone in response to the rise in inflation. Rates themselves are expected to stay unchanged this time. The verdict comes on Wednesday. Until then, other central banks will be on duty, while the G7 gets under way in Evian. A MarketScreener team will be on the ground to cover the event from close quarters.

While the Fed and the G7 had been marked in red on calendars for several months, an unscheduled event also stirred up the weekend. The US administration ordered Anthropic to shut off foreign access to the latest version of its AI, Claude Fable 5 and Mythos 5. Anthropic complied reluctantly, apologising to its users. The episode is probably a foretaste of what lies ahead: the balance of power will also be fought out between AI models. We are a long way from the tools that, three years ago, produced amusing but rather ropey images on demand. Writing in Le Grand Continent on Saturday after noticing that Claude Fable had been blocked, Victor Storchan commented: "For the first time, a frontier model is being treated as a strategic technology, access to which is strictly restricted in the name of national security for any foreign national, whether or not they are on US soil, including the foreign developers who build it." I am spending a little time on the subject this morning because it is another sign of AI's growing importance. More prosaically, it could be bad news for the valuation of Anthropic, or OpenAI, as it seeks to maximise its scale ahead of a stock-market listing, but we will come back to that another time.

Other things worth knowing to start the week:

  • Donald Trump will dine at Versailles with Emmanuel Macron on Wednesday, after the G7. That is not stopping the US administration from threatening France with 100% tariffs on wine unless its digital services tax is scrapped, according to the NY Post.
  • Swiss voters have rejected a population cap in a referendum.
  • On the macro agenda, and with no disrespect intended to the Bank of England or the central banks of Brazil, Japan, Australia and Switzerland, the Federal Reserve will be the main event on Wednesday.
  • On the corporate agenda, there is not much left to get excited about, apart from Accenture and Orsted among the companies in focus.

In Asia-Pacific, SpaceX and Hormuz are enough to put indices in a buoyant mood. The highest-beta markets are surging: Japan is up 4.7% and South Korea 5.3%. Australia (+1.3%), India (+1.6%) and mainland China (+1.5%) are also performing well. Hong Kong is a little more subdued (+0.5%). Europe is expected to open sharply higher.

Today's economic highlights:

On today's agenda: wholesale prices in Germany; consumer confidence in Switzerland; trade balance in Italy and the Euro Area, along with industrial production; in Canada with housing starts; in the United States with the Empire State Manufacturing Index, industrial production, and the NAHB Housing Market Index. See the full calendar here.

  • GBP / USD: US$1.34
  • Gold: US$4,305.8
  • Crude Oil (BRENT): US$83.77
  • United States 10 years: 4.44%
  • BITCOIN: US$65,850.4

In corporate news:

  • HSBC faces 400 million USD exposure to UAE's IFFCO after debt restructuring talks fail.
  • Allianz emerges as top bidder for HSBC Life Singapore.
  • AstraZeneca receives FDA approval for Truqap combination therapy targeting PTEN-deficient prostate cancer.
  • Vistry lance un plan de suppressions de postes volontaires pour préserver sa trésorerie.
  • Peel Hunt reports FY26 revenue of GBP143.5M.
  • Nordea joins the OMX Copenhagen index, replacing Bavarian Nordic.
  • Shell is considering selling its offshore wind farms.
  • Rheinmetall is concerned about the Franco-German tank project amid budget cuts.
  • Holcim receives conditional approval from the European Commission for the acquisition of Germany’s Xella for €1.85 billion.
  • Partners Group denies rumors of a freeze on its evergreen funds and rules out any changes to their liquidity terms.
  • Avolta partially refinances €750 million in senior bonds.
  • SpaceX finalizes its IPO, which would make Elon Musk the world’s first trillionaire.
  • Amazon reportedly raised concerns about Anthropic’s AI models before the U.S. government imposed restrictions.
  • A Tata iPhone component factory in India is accused of polluting agricultural water.
  • Mark Zuckerberg admits that Meta made mistakes in its AI-related workforce restructuring.
  • Walmart summoned by Chinese regulators over food safety issues.
  • Woodside Energy is reportedly in Exxon’s crosshairs, according to Bloomberg.
  • Amgen ordered to pay $20.2 million in a dispute over antibody patents.
  • OpenAI is reportedly the target of an investigation by a group of attorneys general, Reuters has learned.Aedifica shareholders approve the merger with Cofinimmo.
  • SK Hynix aims for a Nasdaq listing in August.
  • Saudi Prince Alwaleed bin Talal’s holding company, Kingdom Holding, is surging after realizing a gain on SpaceX.
  • Geely Automobile is refocusing on its Hong Kong-listed subsidiary and streamlining its other operations.
  • Main earnings of the day : Peel Hunt, Team Internet.

See more news from UK listed companies here

Analyst Recommendations:

  • Molten Ventures Plc: BNP Paribas maintains its outperform rating and raises the target price from GBP 6.80 to GBP 7.60.
  • Ceres Power Holdings Plc: Berenberg maintains its buy recommendation and reduces the target price from GBX 980 to GBX 950.
  • Wh Smith Plc: Berenberg maintains its hold recommendation and reduces the target price from GBX 574 to GBX 420.
  • Mitie Group Plc: BNP Paribas maintains its neutral recommendation and reduces the target price from GBP 2 to GBP 1.80.
  • Halma Plc: BNP Paribas upgrades to outperform from neutral with a price target raised from GBX 4450 to GBX 4550.
  • Aj Bell Plc: Goldman Sachs downgrades to sell from neutral and reduces the target price from GBX 565 to GBX 555.
  • Wh Smith Plc: RBC Capital maintains its sector perform recommendation and reduces the target price from GBX 600 to GBX 475.
  • Haleon Plc: Morgan Stanley maintains its overweight recommendation and reduces the target price from USD 11.85 to USD 11.60.
  • Easyjet Plc: Barclays maintains its overweight recommendation and raises the target price from GBP 4.80 to GBP 5.70.
  • Softcat Plc: Citi downgrades to neutral from buy and raises the target price from GBP 15.50 to GBP 19.50.
  • Shaftesbury Capital Plc: Citi maintains its buy recommendation and reduces the target price from GBP 2.10 to GBP 2.
  • Safestore Holdings Plc: Morgan Stanley maintains its underweight recommendation and reduces the target price from GBX 675 to GBX 650.
  • Aberdeen Group Plc: Goldman Sachs downgrades to neutral from buy with a target price of GBX 250.
  • Man Group Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 345 to GBX 350.
  • London Stock Exchange Group Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 13070 to GBX 13220.
  • Wizz Air Holdings Plc: UBS maintains its buy recommendation and raises the target price from GBP 14.30 to GBP 16.05.