"The FTSE 100 is on the rise despite a largely mixed start to trade in Europe, with sentiment boosted from this week's weaker inflation figures. Crucially, the UK has seen a notable decline in borrowing costs, with the UK 10-year yield temporarily falling to the lowest level this year. Nonetheless, UK borrowing costs remain elevated in relation to their peers, with the 4.4% 10-year yield standing in stark contrast to the 2.57% seen in the euro area."
"Market jitters seen in the US yesterday have calmed somewhat in today's futures markets, with traders hoping that a meeting between Scott Bessant and his Chinese counterpart will lead to a softening in tone between the two nations. With the 1 November imposition of 100% tariffs looms large, the US are clearly ramping up the rhetoric amid threats that they are considering sweeping export restrictions on anything that is built with US software."
"Nonetheless, there is an optimism that the UK is turning a corner that could soon see the Bank of England start to drive rates down in a more meaningful manner. Rather predictably, today has seen the oil & gas majors gain traction, as Brent crude pushes to a two-week high of $65.50 on fresh Russian sanctions. Meanwhile, gold and silver miner Fresnillo has also gained ground, rising over $5 after precious metals stabilised in the wake of Tuesday's sharp declines."
European trading shows mixed performance while the FTSE 100 advances, aided by weaker inflation and lower UK yields. UK 10-year yields briefly hit the year's low, yet remain high versus the euro area at 4.4% versus 2.57%. Market sentiment is buoyed by hopes the Bank of England may soon lower rates more meaningfully. Oil & gas majors benefit as Brent crude reaches $65.50 on new Russian sanctions, and Fresnillo gains after precious metals stabilise. US-China trade tensions and looming 100% tariffs create positioning and negotiation risks, with potential market upside if talks yield a breakthrough.
Read at London Business News | Londonlovesbusiness.com
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