7th Oct 2024 06:44
(Alliance News) - Equities are continuing to be boosted by a bullish US jobs report, with the FTSE 100 set to follow Asian equities higher on Monday.
SPI Asset Management Stephen Innes said it is a story of geopolitical nerves yielding to "US economic exceptionalism".
"So, what's the market pricing telling us right now? Rate cuts are still on the table, but expectations have cooled slightly after that blockbuster September jobs report. Markets have settled into a steady rhythm, pricing in 25 basis point cuts through the spring. Meanwhile, inflation expectations remain surprisingly well-anchored. That's a sweet spot for markets—a true Goldilocks scenario. Core inflation is gradually easing toward 2%, and policymakers seem to have moved on from their inflation obsession," Innes said.
"But there's a potential wrench in the works—the commodity market. Any real escalation in the Middle East that disrupts oil infrastructure could throw everything into chaos, sending inflation roaring back. If Israel hits Iran's oil or nuclear sites, and the US and UK get dragged in, all bets are off."
IG says futures indicate the FTSE 100 to open 20.7 points higher, 0.3%, at 8.301.33 on Monday. The index of London large-caps closed down just 1.89 points at 8,280.63 on Friday.
US employment growth was sharply higher than expected last month, numbers on Friday showed, lessening the case for the Federal Reserve to enact another jumbo 50 basis interest rate cut.
According to the Bureau of Labor Statistics, nonfarm payroll employment increased by 254,000 in September, markedly ahead of the FXStreet cited consensus which predicted job additions of 140,000.
Nonfarm payrolls picked up from 159,000 in August. August's reading was upwardly revised from 142,000.
The unemployment rate edged down to 4.1% from 4.2%.
In New York on Friday, the Dow Jones Industrial Average added 0.8%, the S&P 500 rose 0.9% and the Nasdaq Composite shot up 1.2%.
In Tokyo on Monday, the Nikkei 225 surged 2.3%, while the S&P/ASX 200 added 0.7%. In Hong Kong, the Hang Seng Index was up 1.1%. Financial markets in Shanghai remain closed.
Israeli Prime Minister Benjamin Netanyahu on Sunday vowed to achieve victory and said his country's military "completely transformed reality" in the year since Hamas's October 7 attack, which has left the country fighting two wars.
Netanyahu told troops Israel "will win" as it battles militants in both the Gaza Strip and Lebanon and prepares to strike Iran, almost a year since the unprecedented attack by Palestinian Hamas militants sparked the Gaza war.
Against the dollar, the pound climbed to USD1.3111 early Monday, from USD1.3102 at the time of the London equities close on Friday. The euro edged up to USD1.0965 from USD1.0962. Against the yen, the dollar fetched JPY148.51, down from JPY148.59.
A barrel of Brent fell to USD77.67 early Monday in London, from USD78.08 late Friday afternoon. Gold bought USD2,643.01 an ounce, down from USD2,655.27.
Monday's local corporate calendar has third-quarter results from Ferrexpo, a producer of iron ore pellets.
The economic calendar has a UK Halifax house price index and German factory orders at 0700 BST.
By Eric Cunha, Alliance News news editor
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