The FTSE 100 rose on Friday as the bond market showed signs of stabilisation and oil prices fell back toward $100, despite the US sending more troops to the Middle East.
The 10-year gilt yield fell back to 5.3% after hitting 5.5% while the 30-year dopped back beneath 6%. The US 30-year yield – a source of yesterday’s concern- had also fallen back.
It would be foolish to call an end to the pressures in the bond market, and today’s stabilisation could prove short-lived if oil prices remain elevated.
Nonetheless, traders were happy to look on the bright side and the FTSE 100 rebounded 0.3% on Friday.
“The FTSE 100 picked itself up off the canvas on Friday, after being knocked for six by Thursday’s aggressive selling in government bonds,” says Dan Coatsworth, head of markets at AJ Bell.
“Other European markets also managed to claw back some ground even as Asian stocks played catch up with losses to match the trend seen in parts of Europe and the US on Thursday.”
The next macro event will come later today with the Non-farm payrolls and the expectations of 90,000 jobs added in September and a 4.1% unemployment.
“A resilient labour report could quickly restore expectations of an interest rate hike at the next meeting, lift yields and help the dollar recover. A weak print would reinforce the case for a hold and, if sufficiently soft, could begin to challenge the broader tightening path into 2027,” said Bas Kooijman, Asset Manager at DHF Capital.
In London, FTSE 100 stocks broadly rebounded on Friday, with 80 constituents higher at the time of writing.
BT was the FTSE 100’s top riser, jumping 4% amid TalkTalk takeover reports.
Polar Capital Technology Trust was among the best performers, with NASDAQ futures pointing to a strong rebound when trading gets underway this afternoon. Halma caught traders’ interest, as did Balfour Beatty and Antofagasta.
IG Group was firmly at the bottom of the FTSE 100 leaderboard after lowering its revenue outlook, despite strong customer numbers. Shares sank 22%.