US Futures Down, EU Stocks Lower; UK Unemployment Holds at 4.9%; Oil Prices Rise on Middle East Tensions

## Lead US stock futures are trending lower, with S&P 500 futures down 0.42% and Nasdaq futures down 0.86%. European equities are also set for a lower open. In economic news, the UK unemployment rate held at 4.9% in July, while employment change was -13k. Oil prices continue to climb, with WTI crude up 1.01% and Brent crude up 0.83%, driven by escalating geopolitical tensions in the Middle East and concerns over the Strait of Hormuz. ## Session narrative US equity futures are pointing lower this morning, with S&P 500 futures down 0.42% and Nasdaq futures down 0.86%, reflecting broader market caution. European equity markets are also anticipated to open lower, extending recent retreats from record highs. This comes as global bond yields have surged, with the Eurozone 10-year sovereign bond yield climbing above 3.2%. In the UK, the July unemployment rate remained at 4.9%, matching the previous month's figure but slightly above the 4.8% forecast. Employment change for the UK registered -13k, compared to a prior reading of -4k. Geopolitical concerns continue to impact commodity markets, with WTI crude up 1.01% and Brent crude up 0.83% as hopes for a diplomatic resolution in the Middle East fade and incidents are reported in the Strait of Hormuz. Gold prices are holding above $4,400, supported by scaled-back expectations for a Fed rate hike. The Indonesian Rupiah softened as Bank Indonesia's policy meeting began, while Indonesian equities rose 1.0%. China has reportedly removed Microsoft Windows from state agencies. The People's Bank of China held a macroprudential work meeting and stated it would innovate policy tools. ## Cross-asset check Equity futures are broadly lower, with S&P 500 futures down 0.42% and Nasdaq futures down 0.86%. The VIX is up 6.60%. In rates, the US 10-year yield is up 0.60% at 4.72%, and long-duration Treasuries are down 0.87%. The US Dollar Index is up 0.03%, with USD/JPY up 0.22%. Commodities are mixed, with WTI crude up 1.01% and Brent crude up 0.83%. Gold is down 0.51%, and silver is down 1.38%. European natural gas prices are extending gains above €62 per MWh. ## Themes & continuing stories Geopolitical tensions in the Middle East remain a dominant theme, driving oil prices higher and contributing to broader market uncertainty. Reports of a vessel being hit in the Strait of Hormuz and fading prospects for a US-Iran peace deal are exacerbating these concerns. This is also impacting European natural gas prices due to potential LNG shipment delays. Central bank activity is in focus, with Bank Indonesia's policy meeting underway and the PBoC discussing macroprudential policy tools. Economic data from the UK, showing a steady unemployment rate but a decline in employment, is also being digested by markets. ## What’s ahead Market participants will be monitoring further developments in the Middle East and any updates from central banks. The Fed Interest Rate Probabilities remain a key area of focus for traders.