Starmer Resigns as UK Faces Seventh Leader in a Decade

The political upheaval in London coincides with a cooling of tensions in energy markets. Brent crude futures dipped below $80 per barrel following the start of peace talks in Switzerland, which helped temper fears regarding the Strait of Hormuz. While Tehran had previously claimed to have closed the critical waterway, traffic has since resumed at approximately one-quarter of pre-war levels.

Financial markets reacted with caution to the leadership vacuum. UK stocks slipped on the news, though sterling and gilt yields remained largely stable. Investors are now focused on the Labour Party’s selection process and the potential appointment of a new finance minister. Meanwhile, the yen continues to hover near a 40-year low against the dollar, leaving traders to anticipate possible intervention from Japanese authorities.

In the United States, Wall Street is recalibrating after a week marked by Kevin Warsh’s first meeting as Federal Reserve chief and the recent SpaceX IPO. While SpaceX shares remain up more than 30% from their listing price, hawkish commentary from the Fed has dampened some of the recent market enthusiasm. Attention now shifts toward Thursday’s release of U.S. personal consumption expenditures data, which will provide further clarity on the current inflation trajectory.