2nd Oct 2026 06:55
(Alliance News) - Stocks in London are set to open higher on Friday, recovering a fraction of the lost ground from Thursday's sell-off, ahead of US nonfarm payrolls data in the afternoon.
IG says futures indicate the FTSE 100 to open 34.8 points, 0.3%, at 10,463.07 on Friday. The index of London large-caps plunged 177.73 points, 1.7%, at 10,428.27 on Thursday. It is down 2.5% so far this week.
In Tokyo on Friday, the Nikkei 225 was down 1.0%, after jumping 3.3% on Thursday. The Hang Seng Index in Hong Kong was down 2.7%. Financial markets in Hong Kong were closed on Thursday. They remain closed in Shanghai. Sydney's S&P/ASX 200 was up 0.7%.
In New York on Thursday, the Dow Jones Industrial Average ended slightly higher, while the S&P 500 rose 0.2%. The Nasdaq Composite rose fractionally.
The yield on the US 10-year Treasury was quoted at 5.25% early Friday, from 5.30% late Thursday afternoon. The yield on the US 30-year Treasury was steady at 5.63%.
"US yields finally eased yesterday, partly as the sharp selloff and now-attractive yields tempted buyers back into Treasuries, and partly as mounting concerns about European debt — especially France — encouraged a flight to safety," Swissquote analyst Ipek Ozkardeskaya commented.
Part of the jitters in Europe lie in France, Ozkardeskaya added.
The French government defended on Thursday its plans to cut spending and raise taxes as it tries to thread the needle between jittery debt markets and public discontent over the rising cost of living.
The 2027 budget bill – to be examined in a divided parliament in coming weeks – comes ahead of the April-May polls to replace centrist President Emmanuel Macron, with the far right eyeing its best chance so far at seizing power.
France has been struggling to contain its debt, with the budget deficit still well above the eurozone's 3% ceiling. According to the draft budget bill seen by AFP, France's government hopes to reduce the deficit to 5% of GDP with EUR43 billion in spending cuts and other measures.
Ozkardeskaya continued: "The sharp weakening of appetite for French debt is a big issue for the broader euro area and the euro itself. France is the euro area's second-largest economy — we used to call it the 'core', along with Germany, back during the 2012 sovereign debt crisis! So, if concerns spread, other heavily indebted members could also face higher borrowing costs, tightening financial conditions across the region. For the euro, that means weaker growth prospects and a growing risk premium. The EURUSD tanked to 1.1215 yesterday, as the market's focus shifted from the central-bank convergence/divergence story towards the euro area sovereign debt story."
Against the dollar, the euro rose to USD1.1249 on Friday morning from USD1.1238 at the time of the London equities close on Thursday. It fell to its lowest level since May 2025 on Thursday.
Sterling traded at EUR1.1738 against the single currency, barely budging from EUR1.1739 late Thursday afternoon.
The pound traded at USD1.3208 against the greenback early Friday, edging up from USD1.3204. The dollar traded at JPY157.88, up slightly from JPY157.48.
Focus on Friday is on the US nonfarm payrolls report. According to consensus cited by FXStreet, the US economy is expected to have added 90,000 jobs last month, cooling from 162,000 in August.
Quintex Intel analyst Stephen Innes commented: "Friday's payroll report lands at an awkward moment for the rates market. Yields have finally backed away from multi-decade highs, softer core [personal consumption expenditures index] has taken some heat out of the immediate Fed path, and the recent tone from Williams and Jefferson has given the dovish side of the argument a firmer footing. The next jobs print therefore does not need to collapse to matter. It simply needs to avoid handing the Fed another excuse to reach for the hammer."
Fed Vice Chair Philip Jefferson said policymakers should make a decision after "carefully examining trends in the data", adding that "my colleagues and I will need to come to our own judgment, which may take more time".
And another official, Michelle Bowman, said she did not "currently see an urgent need for further action".
The remarks came after New York Fed chief John Williams said "there is no need for urgency, and we have time to gather more information".
Still, Dallas Fed President Lorie Logan warned: "I currently estimate the target range needs to rise an additional 50 basis points or more to appropriately balance the outlook and risks for our dual mandate goals."
A barrel of Brent rose to USD102.08 early Friday, from USD101.71 at the time of the London equities close on Thursday. Gold climbed to USD4,187.11 an ounce from USD4,163.35.
Friday's local corporate calendar has full-year results from pub operator JD Wetherspoon.
Friday's global economic calendar has eurozone inflation figures and the US jobs report, including nonfarm payrolls data.
By Eric Cunha, Alliance News news editor
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