19th Sep 2025 06:59
(Alliance News) - London's FTSE 100 is expected to tread water on Friday, ahead of UK data and after a slew of rate decisions this week.
Stock market futures indicate the FTSE 100 to open just 3.5 points lower at 9,224.61 on Friday. The index of London large-caps closed up 19.74, 0.2% at 9,228.11 on Thursday. But it has shrunk 0.6% so far this week.
The pound fell to USD1.3544 on Friday morning, from USD1.3556 at the time of the London equities close on Thursday. The euro bought USD1.1773, down from USD1.1786. Against the yen, the dollar fell to JPY147.54 from JPY147.94.
In New York on Thursday, the Dow Jones Industrial Average closed up 0.3%, the S&P 500 added 0.5% and the Nasdaq Composite climbed 0.9%.
"The Fed itself tried its best to sound dovish, paring rates and sprinkling 'risk-management' language across the wires. But the market already knows that the bullet's been fired. Forecasts still assume a soft landing, and the dots suggest only modest easing. Traders, though, are already pencilling in more: another 50bp by December, over a full point by end-2026," SPI Asset Management analyst Stephen Innes commented.
The yield on the 10-year US Treasury advanced to 4.12% early Friday, from 4.11% at the time of the London equities close Thursday. The yield on the 30-year widened to 4.74% from 4.73%.
Innes added: "The Treasury curve is climbing again, long-end first, like a slow but relentless tide that lifts every hull, whether seaworthy or not. Two, three basis points higher may not sound like much, but stack them on top of yesterday’s move and suddenly the entire yield structure feels heavier. Growth keeps humming, inflation whispers in the background, and traders are forced to recalibrate their bearings—compasses twitching as term premium seeps back into the mix."
The Bank of England on Thursday voted to hold UK interest rates at 4.00% as expected, amid stubbornly lofty inflation.
Seven members of the nine strong Monetary Policy Committee, including BoE Governor Andrew Bailey, voted to hold interest rates. Bailey was joined by Sarah Breeden, Megan Greene, Clare Lombardelli, Catherine Mann, Huw Pill and Dave Ramsden.
Two MPC members, Swati Dhingra and Alan Taylor, backed a 25 basis point cut.
The committee voted by a majority of 7-2 to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by GBP70 billion over the next 12 months, to a total of GBP488 billion.
Andrew Bailey, Sarah Breeden, Swati Dhingra, Megan Greene, Clare Lombardelli, Dave Ramsden and Alan Taylor voted in favour of the GBP70 billion reduction.
Catherine Mann preferred a reduction of GBP62 billion and Huw Pill voted to maintain the pace of quantitative tightening at GBP100 billion.
The Nikkei 225 was down 0.4% late Friday. In China, the Shanghai Composite was down 0.4%, while the Hang Seng Index in Hong Kong was down 0.3%. In Sydney, the S&P/ASX 200 was up 0.4%.
The Bank of Japan said Friday it would keep its main interest rate unchanged at 0.50%, as expected, with economists forecasting officials to announce a hike in the coming months.
However, the BoJ also said it would sell financial assets it had previously acquired to keep rates lower – including exchange-traded funds – marking a new phase of its monetary tightening policy.
"Japan's economic growth is likely to moderate, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits," the BoJ said in a statement following the decision.
"All in all, US and global assets popped the champagne yesterday—but Japanese equities are feeling hungover this morning. The Bank of Japan maintained its rates unchanged, which is positive because the next move is expected to be a rate hike, but it also announced it will start selling about JPY330 billion worth of ETFs per year. Considering the BoJ has become a major holder of domestic assets, the announcement did little to support investor sentiment into the weekend," Swissquote analyst Ipek Ozkardeskaya commented.
Brent rose to USD67.16 a barrel early Friday, from USD67.09 late Thursday. Gold was largely flat at USD3,654.11 an ounce against USD3,654.51.
On Friday's economic calendar, the schedule includes German producer inflation, UK public sector net borrowing and retail sales.
By Eric Cunha, Alliance News news editor
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