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London stocks started the week on a positive note, with the FTSE 100 inching up on Monday as the pound advanced against the U.S. dollar.

By 11:04 GMT, the UK’s blue-chip index was up 0.1%, while sterling gained 0.2% versus the dollar, pushing above the 1.35 level. Elsewhere in Europe, Germany’s DAX added 0.3% and France’s CAC 40 ticked 0.09% higher.

BAE climbs after Norway frigate deal

Defense contractor BAE Systems PLC (LSE:BA.) was among the standout performers after Norway confirmed it would purchase new Type 26 frigates from the UK in what officials described as the country’s biggest military procurement in history.

Prime Minister Jonas Gahr Støre said on Sunday that the UK partnership offers the strongest foundation for achieving Norway’s defense goals, as approved by parliament. Deliveries of the frigates are expected to begin in 2030. The selection followed a months-long review of proposals from France, Germany, the U.S., and the UK.

Kainos surges on raised revenue outlook

Kainos Group PLC (LSE:KNOS) saw its shares rocket more than 19% after the IT services firm lifted its full-year revenue forecast, crediting better-than-expected sales in the first half.

The company said adjusted pre-tax profit should be in line with consensus projections of £65.1 million to £74.7 million, based on revenue estimates of £393.4 million. The upbeat guidance follows a strong finish to the previous financial year.

Domino’s announces buyback

Domino’s Pizza Group PLC (LSE:DOM) rose over 4% after revealing a £20 million share repurchase program. The buyback, which began immediately, is intended to reduce share capital and will run until completion.

Tesco boosted by JPMorgan upgrade

Shares in Tesco PLC (LSE:TSCO) gained more than 2% after JPMorgan added the supermarket chain to its Positive Catalyst Watch. The bank reiterated its “overweight” rating and lifted its price target to 500p from 450p, citing strong earnings momentum and improved margin visibility.

CMA probes Greencore-Bakkavor tie-up

Separately, the UK Competition and Markets Authority opened a preliminary review into Greencore Group’s (LSE:GNC) proposed £1.2 billion takeover of Bakkavor Group PLC (LSE:BAKK).

The merger would unite two of the UK’s largest suppliers of convenience and chilled foods. The CMA said on Monday that it had gathered sufficient information to launch its initial investigation.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Markets enter a holiday-shortened week under the shadow of legal uncertainty surrounding U.S. tariffs. Investors are also preparing for critical employment data releases, a series of business activity metrics, and the Federal Reserve’s “Beige Book.” On the earnings front, semiconductor company Broadcom and software giant Salesforce are set to take center stage.

Legal dispute over Trump-era tariffs

The tariffs implemented during the Trump administration have faced multiple legal challenges, particularly from parties questioning the president’s use of emergency powers to impose import duties.

Investors are closely monitoring a pivotal decision from the U.S. Court of Appeals for the Federal Circuit issued late Friday, which rejected President Donald Trump’s broad tariffs. The White House has until mid-October to appeal to the Supreme Court, or the ruling will take effect.

Reports suggest that Trump officials anticipated the Supreme Court would ultimately have to resolve the matter, and the administration remains confident that the tariffs—and Trump’s assertion of authority to enact them—will eventually receive support from the court’s conservative majority.

“Global trading partners will no doubt find it premature to be celebrating just yet, but we’ll be interested in seeing whether the Treasury market comes under any further pressure if the US has to hand back already received tariff revenues,” analysts at ING said in a note.

Jobs data takes the spotlight

Friday’s labor market report is expected to provide insight into the broader economy and act as a key test of investor confidence in a potential Fed rate cut at the September meeting.

Last month’s softer-than-expected payrolls data increased expectations for a reduction in borrowing costs, despite ongoing concerns about persistent inflation.

Fed Chair Jerome Powell also cautioned in a speech at an economic symposium in Wyoming that risks to the labor market were rising. As of Monday morning, the CME FedWatch Tool indicated more than an 87% probability that the Fed will cut rates by 25 basis points from the current 4.25%-4.5% range at the conclusion of its two-day meeting on Sept. 16-17.

Economists are projecting that August nonfarm payrolls will come in at 74,000, close to July’s 73,000. Controversy over prior revisions led to the dismissal of the commissioner of the Bureau of Labor Statistics.

U.S. ISM manufacturing and services data

This week’s calendar also includes readings on private-sector employment, job openings, and key business activity figures, providing insight into the effects of Trump’s tariffs.

The Institute for Supply Management’s (ISM) manufacturing PMI for August is forecast at 48.9, up from 48.0 in July. Meanwhile, the ISM services PMI is expected at 50.5, slightly above July’s 50.1. Readings below 50 indicate contraction, while levels above 50 signal expansion.

Manufacturing, which accounts for just over 10% of the U.S. economy, contracted for the fifth consecutive month in July, with employment at factories falling to a five-year low. Services, which make up more than two-thirds of the economy, were mostly flat, with employment trends weakening.

Beige Book preview

The Fed will publish its latest “Beige Book” on Wednesday, providing one of the final snapshots of economic conditions before the September policy meeting.

The report, the first since July, highlighted concerns from contacts across industries about ongoing cost pressures. “This would increase the likelihood that consumer prices will start to rise more rapidly by late summer,” it noted, adding that all 12 Fed districts reported impacts from Trump’s trade policies.

The Beige Book also showed that many companies were delaying hiring and layoffs amid uncertainty over tariffs, signaling caution in business activity.

Earnings focus: Broadcom and Salesforce

Broadcom (NASDAQ:AVGO) will lead the earnings schedule this week. Its quarterly report may provide insight into AI-related spending trends, which have weakened after several tech companies reported disappointing results.

Last week, Nvidia (NASDAQ:NVDA), a key player in AI, released a cautious sales forecast for the current quarter. While still sizable in absolute terms, the outlook disappointed investors who have come to expect exceptional figures from the AI bellwether.

“While investors are pulling back from AI, they seem to be returning to software, an industry many fear could suffer displacement/disruption risk from AI,” analysts at Vital Knowledge said in a note. They added that Salesforce’s results on Wednesday will be “a big test for the group.”

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Eurozone manufacturing activity expanded in August for the first time since mid-2022, driven by stronger domestic demand and increased production, according to survey data released Monday.

The HCOB Eurozone Manufacturing PMI climbed to 50.7, up from 49.8 in July and slightly above the preliminary estimate of 50.5. This represents the highest reading in over three years and marks the first time the index has surpassed the 50.0 growth threshold since June 2022.

The return to expansion signals a potential positive shift in momentum for the bloc’s manufacturing sector after more than two years of contraction. Respondents to the survey pointed to rising domestic orders and a rebound in output as key factors behind the improvement, boosting optimism about future activity.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

BAE Systems (LSE:BA.) shares rose Monday after Norway selected the United Kingdom to supply new Type 26 frigates in what officials are calling the largest defense procurement in the country’s history.

Norwegian Prime Minister Jonas Gahr Støre announced the decision on Sunday, highlighting that the partnership with the UK offers the strongest foundation for achieving defense objectives approved by the Storting, Norway’s parliament. Deliveries of the frigates are expected to begin in 2030.

The decision follows months of evaluation, during which proposals from France, Germany, the United States, and the UK were assessed. Støre described the choice as challenging, noting that all four nations offered competitive bids, but the Chief of Defence recommended the UK, calling it a historic step in defense cooperation.

Under the agreement, both the British and Norwegian navies will acquire Type 26 frigates with matching technical specifications, allowing for joint operations, training, and maintenance. Norwegian Defense Minister Tore O. Sandvik said this compatibility will help lower costs and enable crew interchangeability between the two navies.

The vessels will carry anti-submarine helicopters, though the specific model has yet to be decided. Authorities are also reviewing options for unmanned systems. A binding intergovernmental agreement between Norway and the UK is expected soon, after which both governments will negotiate contracts with BAE Systems to finalize pricing and delivery timelines. Sandvik added that the Storting will later review and approve the investment decision.

The deal includes a commitment to industrial collaboration, with UK authorities guaranteeing cooperation with Norwegian industry equivalent to the contract’s full value. Støre emphasized that Norwegian companies will play a key role in the maintenance and upgrading of the ships, and both countries have identified potential areas for joint technological and industrial projects.

Officials stressed that the frigates are designed for submarine detection and combat. Each Type 26 vessel will displace 7,600 tons, measure 151.4 meters in length, reach speeds exceeding 26 knots, and cover a range of over 7,000 nautical miles. They will carry a crew of approximately 166, with room for up to 208 personnel, and include cargo space for unmanned vehicles.

Støre said the partnership will enhance NATO’s ability to monitor and secure northern maritime areas, underlining the importance of shared security interests with the UK.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

European equities nudged higher on Monday, supported in part by a rise in Danish pharmaceutical company Novo Nordisk (NYSE:NVO).

The company’s stock surged 2.8% in Copenhagen after data indicated that its popular weight-loss drug Wegovy provided stronger heart-protective benefits than a competing treatment from U.S. firm Eli Lilly (NYSE:LLY). Novo’s shares had been under pressure recently after the company lowered its 2025 sales growth forecast due to competition from copycat versions of Wegovy.

A rally in healthcare stocks helped lift the pan-European Stoxx 600 by 0.4%, while Germany’s Dax climbed 0.5%, the U.K.’s FTSE 100 added 0.3%, and France’s CAC 40 advanced 0.3% by 08:12 GMT.

Defense stocks also saw gains after Norway announced it would collaborate with the U.K. on a £10 billion frigate acquisition program, with shares in BAE Systems (LSE:BA.) particularly buoyant.

Trading volumes are expected to remain light as U.S. markets are closed for Labor Day. Investors were also digesting a key ruling from the U.S. Court of Appeals for the Federal Circuit issued Friday, which rejected President Donald Trump’s broad tariffs.

“Global trading partners will no doubt find it premature to be celebrating just yet, but we’ll be interested in seeing whether the Treasury market comes under any further pressure if the U.S. has to hand back already received tariff revenues,” analysts at ING said in a note.

The White House has until mid-October to appeal to the Supreme Court. Media reports suggest that Trump officials had anticipated the high court would eventually need to resolve the issue, and the administration remains confident that the tariffs — and Trump’s authority to impose them — will ultimately gain support from the court’s conservative majority.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Britain’s manufacturing sector saw activity decline in August as new orders softened, impacted by global trade frictions and recent increases in domestic taxes, according to Monday’s survey data.

The S&P Global/CIPS Manufacturing PMI fell to 47.0 in August from 48.0 in July, marking the first decrease in five months. The reading also came in below the preliminary estimate of 47.3 and remained below the 50 mark that separates expansion from contraction, extending the industry’s downturn to an 11th consecutive month.

Survey respondents highlighted weak demand, international tariff pressures, and rising client costs as key challenges. Additional headwinds included the April increase in the minimum wage and higher employer taxes, while both export orders and overall demand shrank at their fastest pace in four months.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Domino’s Pizza Group (LSE:DOM) saw its shares climb more than 4% on Monday after unveiling a £20 million share repurchase plan.

The initiative, which started immediately, aims to reduce the company’s share capital by acquiring up to 39,471,274 ordinary shares, each valued at 25/48 pence. All repurchased shares will be canceled.

The buyback will take place on the London Stock Exchange under authority granted by shareholders at Domino’s annual general meeting in April. This authorization remains valid until the company’s next AGM in 2026, or earlier on July 24, 2026.

Domino’s has appointed Panmure Liberum Limited to oversee the transactions, ensuring they remain within program parameters, including during trading blackout periods.

The company also confirmed that its guidance for fiscal year 2025 is largely unchanged, with the exception of projected year-end net debt, now expected to fall between £280 million and £300 million.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

U.S. markets remain closed on Monday for Labor Day, but investors are preparing for a pivotal week, with fresh labor market data set to potentially cement expectations for a Federal Reserve rate cut later this month. Meanwhile, the legal battle over sweeping U.S. tariffs continues, with a federal appeals court recently rejecting the levies imposed during the Trump administration.

Holiday-thinned trading and mixed Asian equities

With the U.S. holiday thinning liquidity, Asian markets showed mixed movements: Japan’s Nikkei and South Korean stocks slipped, while Chinese equities extended their recent rally, boosted by stronger-than-expected manufacturing survey results. Shares of Alibaba (NYSE:BABA) jumped more than 10%, marking its biggest single-day rise since 2022, driven by optimism for its cloud business.

Wall Street has steadily rebounded since April’s tariff-driven selloff, supported by hopes that President Donald Trump’s tariffs will not derail the U.S. economy and by excitement over AI-related investment returns. Analysts note that this week’s economic data and the Fed’s rate decision could strongly influence sentiment heading into September.

Legal challenges to Trump-era tariffs

The Trump administration’s tariffs have faced multiple legal challenges, particularly regarding the president’s use of emergency powers. A decisive ruling came Friday when the U.S. Court of Appeals for the Federal Circuit rejected the tariffs, upholding a lower court decision. The White House has until mid-October to appeal to the Supreme Court or let the ruling take effect.

In a client note, Vital Knowledge analysts commented, “The appeals court decision is at best neutral for markets. It won’t come close come close to eliminating Trump’s import taxes, and it just creates more uncertainty for Corporate America as the White House searches for a studier legal scaffolding for its draconian trade policy[.]”

Labor market data in focus

Friday’s U.S. payroll report is set to offer insights into the broader economy and test whether investors’ expectations of a Fed rate cut are justified. Last month’s soft report reinforced bets on lower borrowing costs, even as policymakers remain cautious about inflation. Fed Chair Jerome Powell highlighted increasing risks to the job market at a Wyoming symposium. According to CME’s FedWatch Tool, there is currently more than an 87% chance that the Fed will reduce rates by 25 basis points at its Sept. 16-17 meeting. Economists expect nonfarm payrolls to rise by 74,000 in August, near July’s 73,000 figure.

China’s manufacturing activity

A private survey indicated that China’s factory activity grew at the fastest rate in five months in August, providing a positive signal amid weaker official data. The RatingDog China General Manufacturing PMI rose to 50.5 from 49.5 in July, surpassing the forecast of 49.7 and moving into expansion territory.

“New export orders are still in contraction, but the pace of decline has eased. That’s encouraging, yet we shouldn’t get carried away, because external demand looks partly pulled forward while domestic demand stays soft, so the upside to output may be limited unless domestic demand firms up,” said Yao Yu, Founder at RatingDog. Employment remained constrained, falling for the fifth consecutive month, with rising input costs and supply delays tempering optimism.

Oil prices higher amid geopolitical concerns

Oil markets moved higher on Monday, with traders balancing potential supply disruptions from Russia-Ukraine airstrikes against OPEC+ output increases and the effects of U.S. tariffs on demand. By 03:41 ET, Brent October futures gained 0.5% to $67.81 per barrel, while WTI rose 0.6% to $64.36 per barrel. Both contracts fell over 7% in August amid concerns of a supply glut from ongoing production increases.

“Oil prices settled lower last week despite growing European calls for secondary sanctions on buyers of Russian oil and gas. The mild reaction may suggest the market is becoming increasingly numb towards sanction risks,” analysts at ING said. Meanwhile, Ukraine’s president warned Sunday that the country would retaliate against Russian drone attacks on power facilities, following weeks of airstrikes targeting energy infrastructure that threaten Russian oil exports.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Gold prices surged to their highest level in over four months during Asian trading on Monday, buoyed by expectations of a Federal Reserve rate cut and safe-haven demand triggered by U.S. tariff uncertainty and political developments affecting the central bank.

Spot gold advanced 0.9% to $3,480.56 an ounce, marking its strongest level since mid-April, while December gold futures jumped 1% to $3,551.82/oz by 01:55 ET (05:55 GMT). This move extends bullion’s recent rally, with gold poised for a fifth consecutive day of gains after climbing nearly 5% in August. Silver also rose sharply, reaching a 14-year high.

Rate Cut Bets and Jobs Data Support Gold

Investor interest in gold increased after the latest U.S. personal consumption expenditures (PCE) price index largely matched expectations, reinforcing expectations for a September Fed rate cut. The CME FedWatch tool shows nearly a 90% probability of a 25-basis-point reduction. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making bullion more appealing. Market attention now turns to U.S. nonfarm payrolls later this week, which could influence near-term rate cut expectations.

Trade and Political Risks Boost Safe-Haven Demand

Safe-haven flows into gold were also supported by trade policy uncertainty. Last week, a U.S. appeals court ruled many Trump-era tariffs unlawful but kept them in place until October 14 to allow time for a Supreme Court appeal. Meanwhile, political pressure on the Fed added to caution after President Donald Trump attempted to remove Federal Reserve Governor Lisa Cook over alleged mortgage fraud. Cook has rejected the move and filed a lawsuit challenging her dismissal.

Other Metals Follow Bullion Higher

Precious metals broadly advanced Monday, with platinum futures up 1.3% to $1,346.65/oz and silver futures climbing 1.5% to $41.32/oz, the highest since August 2024. Copper markets were largely stable, with London Metal Exchange copper futures at $9,934.65 a ton and U.S. copper futures slipping 0.2% to $4.60 per pound.

A private survey in China, the world’s largest copper consumer, showed factory activity expanded at its fastest pace in five months in August amid easing U.S.-China trade tensions. These results contrasted with official data reporting a fifth consecutive month of contraction, hinting at early signs of industrial recovery.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Most Asian currencies and the U.S. dollar remained relatively steady on Monday as investors cautiously weighed the likelihood of a Federal Reserve rate cut later this month, with key U.S. payroll data due at the end of the week.

With U.S. markets closed for a public holiday, market participants focused on regional economic indicators, including factory activity from Japan and China. The U.S. Dollar Index, which tracks the greenback against a basket of major currencies, slipped 0.1% during Asian trading hours after finishing largely flat last week. U.S. Dollar Index futures were largely unchanged as of 04:59 GMT.

Markets Digest Fed Easing Prospects After PCE Data

Currency movements remained muted as traders assessed the potential for Fed policy easing next month. According to the CME FedWatch tool, there is an 89% probability of a 25-basis-point rate cut at the September 16–17 meeting. Expectations were supported by Fed Chair Jerome Powell’s comments at the Jackson Hole symposium, where he emphasized that policymakers are ready to adjust policy if inflation continues to ease and the labor market shows signs of slowing.

Data released Friday showed the U.S. core PCE price index, the Fed’s preferred inflation gauge, rose 0.3% month-on-month, bringing the annual rate to 2.9%, the highest in five months. The figures were in line with expectations, suggesting that U.S. President Donald Trump’s broad tariffs have not significantly passed through to consumer prices, despite recent surprises in producer inflation. Attention now turns to Friday’s August nonfarm payrolls report, which will be critical in shaping bets for a rate cut.

Asian Currencies Show Limited Moves; PMIs Mixed

The Indian rupee edged up 0.1% to 88.25 per dollar, staying near Friday’s record high of 88.31. The Japanese yen was largely unchanged. A private survey indicated Japan’s factory activity contracted in August, hit by declining export orders as U.S. tariffs weighed on export-focused manufacturers.

In China, the onshore yuan (USD/CNY) remained steady, while the offshore yuan (USD/CNH) ticked 0.1% higher. A RatingDog survey showed factory activity expanded at its fastest pace in five months, reflecting easing U.S.-China trade tensions. This contrasted with the official PMI, which reported a fifth consecutive contraction in August, but offered some optimism for a potential rebound in industrial demand.

Elsewhere, the South Korean won rose 0.3% versus the dollar, the Singapore dollar traded flat, and the Australian dollar gained 0.1% against the greenback.

Investors are also monitoring concerns over Fed independence after President Trump attempted last week to dismiss Federal Reserve Governor Lisa Cook over alleged mortgage fraud in 2021. Cook has rejected the move and filed a lawsuit challenging her removal.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.