The FTSE 100 was fairly steady on Friday as traders awaited the US Non-Farm Payrolls amid easing concerns of an interest rate hike.
London’s flagship index was almost dead flat just after midday on Friday.
The narrative in the coming weeks will likely be dominated by a ‘will they/wont they’ discussion around a US rate hike, with several key data points on the horizon.
The first major economic data reading that could influence interest rates comes today: the US jobs report, which is expected to show that the US added 56,000 jobs in August while the unemployment rate held steady at 4.1%.
A reading of 56,000 itself suggests some softness in the economy, but as always, the deviation from the estimate will drive the conversation.
“Constantly changing interest rate expectations have kept investors on their toes this week,” said Dan Coatsworth, head of markets at AJ Bell.
“Having spent several days in the worry zone amid fears of growing inflationary pressures, markets have ended the week on a calmer note.
Odds of a rate hike have fallen in the past 24 hours after the Fed’s Waller signalled he thought rates should be kept at current levels.
“Prior to his remarks, the market had expected up to three hikes by the end of 2026,” Coatsworth said.
“Traders lowered the chance of a September rate hike from 63.2% to 50.4%, bringing a relief rally across US shares. That positive sentiment extended to much of Asia on Friday but Europe wasn’t as upbeat.”
The S&P 500 rallied 1% overnight, putting Europe on a firmer footing at the open.
Computacenter has fast become the FTSE 100’s leading AI play, with its stock tracking moves in Wall Street’s leading AI stocks. A good session yesterday for AI infrastructure shares translated into a 3% rally for Computacenter on Friday.
Vodafone was back among the gainers, riding a wave sparked by the launch of its TV service yesterday. Shares were 2% higher at the time of writing.
Experian was the FTSE 100’s top faller, losing 3% amid US pricing pressure.