"Given the multi-national focus of the FTSE 100, American resilience matters to valuations on the index. The key US jobs report is out later, which is expected to show a gradual cooling in the labour market. The ideal scenario is that new hires continue to tick up as expected, indicating economic growth is still purring, but that wage growth eases again, giving the Federal Reserve the scope to cut rates, offering relief to businesses and households."
"But if hiring undershoots forecasts, it's set to add to concerns of a bleaker scenario for the US economy ahead. The latest consumer confidence snapshot indicates pessimism is spreading among middle - and lower-income households, which has also supported expectations for two interest rate cuts from the Fed this year. Geopolitical tensions in the Middle East remain high, despite ongoing negotiations between the US and Iran."
FTSE 100 opened higher, buoyed by gains in mining stocks driven by rising precious metals prices. Crude oil prices rose on reports that American forces could be authorized to seize Iranian oil tankers if negotiations falter. Expectations for US interest rate cuts increased after consumer confidence among Americans fell. Gold strengthened as the dollar weakened amid safe-haven demand. The wealth management sector experienced pressure from AI-related concerns that agentic tax tools could reduce revenues. Mattel shares slid while Hasbro continued to outperform. Geopolitical tensions in the Middle East remain elevated, and a key US jobs report is expected to influence Fed policy hopes.
Read at London Business News | Londonlovesbusiness.com
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