UK Geopolitics, Equities, Commodities, and Crypto Weekly Wrap
In London this week, the big narrative is obviously about Russia not being too pleased regarding the UK manufacturing drones that Ukraine uses to kill Russian soldiers and possibly civilians. If the shoe was on the other foot, I don’t think the UK government and monarch would be too pleased themselves. In geopolitics, there are always two sides to a coin, and with the mighty Russia expressing their views on this, it is up to the UK to decide whether Ukrainian national sovereignty or their own national security is more important.
One could compare this to a Scottish referendum nationalist paramilitary group being supplied drones by Russia to hit targets in England. After all, Eastern European / Eurasian politics is very complicated and has a rich, deep history, but at the same time, I don’t think Western Europe, the EU, and NATO want to see a return of the power of the Soviet USSR. It is a very complicated geopolitical situation, yet Great Britain has some fast decisions to make on the manufacturing of drones in the UK that are used against Russia.
The UK could switch to a tactic of developing the weapons elsewhere, like in a Commonwealth nation under a different company name or some sort of tactic, but I don’t think much gets past Mr. Vladimir Putin and Russian military intelligence. Either way, it’s a very hostile situation, and it’s best for everyone and both sides that it is quickly resolved with a resolution that pleases both sides of the debate on Ukraine’s sovereignty.
FTSE 100
Weekly Performance: Ended up +0.6% for the week, closing at 10,816.56.
Key Drivers: Snapped an earlier six-session losing streak mid-week. A surge in gold prices ($4,600+/oz) boosted heavyweight miners like Antofagasta and Endeavour Mining. Better-than-expected UK private sector Flash PMI data (52.5 in August) also gave blue-chip equities a Friday lift.
FTSE 250
Weekly Performance: Closed down -0.6% for the week at 24,718.82, despite a strong +0.9% rally on Friday.
Key Drivers: Domestic mid-caps faced headwinds mid-week after July UK retail sales fell -0.5% month-on-month and government borrowing came in higher than forecast. M&A activity remained a bright spot, highlighted by a 12% jump in Gamma Communications following takeover interest.
UK Politics
Sanctions & Geopolitics: Foreign Secretary Ed Miliband rolled out a major sanctions package targeting Russian military suppliers, shadow fleet oil tankers, and financial institutions.
Procurement & Energy Policy: The government announced a procurement overhaul requiring businesses bidding for major government contracts (£5m+) to show a stronger commitment to UK job creation. Political debates continue over regional devolution and domestic energy security following calls to reopen North Sea oil and gas drilling.
Commodities
Oil: Up for the week after the Iran and US situation got no better and is possibly looking to re-escalate.
Gold: Up for the week for three straight weeks after finding support at $4,000 an oz.
Silver: Up also back to nearly $70, which could maybe stay in a range of $50–$70 after the silver speculation—where it turned into the new retail trade—being so far behind us.
Equities
S&P 500: The world's benchmark stock index fell for the week, with giants like Nvidia—the world's largest market cap company—recently hitting resistance and the S&P 500 itself coming off recent all-time highs.
Nasdaq: The tech-heavy index was also down for the week.
DAX: Germany's stock index saw some selling pressure.
CAC 40: France's index was also a risk-off trade.
Nikkei 225: Over in Asia, Japan's index saw the same sell-off.
KOSPI: In Korea, the stock index was also bearish for the week.
Forex
USD & DXY: In global currency markets, we saw a big sell-off with the dollar, not down greatly due to macroeconomic data for the week, but rather from the US Treasury. DXY was down nearly 1% for the week.
EUR/USD: Saw a risk-on environment driven by dollar weakness.
GBP great brittish pound seen the same risk on
JPY/usd the Japanese yen seen a choppy week and could not seem to make its mind up after two weeks off recuperating losses
Cryptocurrencies
Market Action: After months of consolidation and a risk-off stance with low volume, the White House crypto summit saw a bullish risk-on tone for decentralized blockchain currencies, with Bitcoin up 25% ish for the week, ending the week at around $78,000 dollars per BTC.
Altcoins: Many altcoins followed, with many talking about BTC getting back to $100,000, but how long will the bullishness last?