​EBC Markets Briefing | Sterling up before election; Intel soared nearly 13%

The pound edged up on Wednesday after the US signalled it may be nearing a deal with Iran. However, it seems Teheran's cliques are tearing each other apart over peace talks.

Trump repealed tariffs on a key UK export, after a state visit from King Charles III and Queen Camilla appeared to help mend transatlantic relations dampened by a series of political standoffs.

The Scotch whisky industry employs around 40,000 people in Scotland, where whisky accounted for 23% of all goods exports in 2025. The exemption is meaningful as UK goods exported to the US plunged around 25% in April.

While UK exports of goods have stayed low, imports of goods increased at the start of 2026, leading to a trade deficit with the country's largest trading partner for three months in a row.

Long-term borrowing costs in the country have reached their highest level since 1998. The impact of global bond routs on UK markets has exceeded that in other G7 nations.

Money ‌markets ⁠were last pricing in at least two 25-bp rate hikes from the BOE this year, with a good chance of a third. Trader will focus on local elections later in the week, with polls against the ruling party.

Sterling has formed a death cross, which signalled a head and shoulders pattern in the making. As such, a decline towards 1.35 looks likely.

Asset recap

As of market close on 5 May, among EBC major products, Intel shares led gains as Apple held discussions about using Intel and Samsung Electronics to produce the main processors for its devices in the US.

PayPal's CEO Enrique Lores outlined a plan to streamline its organizational structure and reduce costs after the digital payments firm's Q1 results left investors underwhelmed.

The STOXX 50 recovered markedly as a rally in technology stocks and a slate of ‌upbeat corporate earnings provided support. UBS Asset Management has announced the addition of a new ETF on the index to its Core range.

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