7th Oct 2026 06:51
(Alliance News) - London's FTSE 100 is set to open lower on Wednesday, as government bond yields surge again and Brent moves back above USD100 a barrel.
IG says futures indicate the FTSE 100 to open down 21.1 points, 0.2%, at 10,520.59 on Wednesday. The index of London large-caps closed up 43.75 points, 0.4%, at 10,541.69 on Tuesday.
Sterling fell to USD1.3247 early Wednesday, from USD1.3280 at the time of the London equities close on Tuesday. Against the euro, it was at EUR1.1793, barely budging from EUR1.1791.
The single currency fell to USD1.1228 from USD1.1264. Versus the yen, the greenback bought JPY158.41, rising from JPY158.07.
The yield on the US 10-year Treasury was quoted at 5.32% early Wednesday, widening markedly from 5.27% at the time of the closing bell on the London Stock Exchange on Tuesday. The yield on the US 30-year Treasury was at 5.69%, stretching from 5.63%.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.5%, the S&P 500 up 0.6% and the Nasdaq Composite up 0.5%.
"The global bond selloff slowed, crude oil fell and the US dollar eased yesterday. Lower oil prices and less pressure on yields supported major US indices, pushing the S&P500 and Nasdaq 100 to fresh record highs. But this morning, oil is rebounding, yields are pushing higher and the dollar is stronger as risks loom," Swissquote analyst Ipek Ozkardeskaya commented.
"Yesterday's US 3-year Treasury auction cleared at 4.93%, the highest yield since May 2006. Indirect bidders, a group that includes foreign investors, bought 57.6% of the offering, below their 12-month average of around 63%, suggesting that higher yields have yet to revive their appetite fully. Today's USD39 billion 10-year auction will be the real test. We will find out whether elevated yields are enough to convince investors to commit for a longer horizon, despite inflation uncertainty, rising government debt and the risk that yields could climb further. The answer will come in a few hours."
The more nervy mood on Wednesday meant Asian stocks struggled. The Nikkei 225 was down 0.6%, but is still up 2.9% so far this week. The Hang Seng Index was also down 0.6%. Sydney's S&P/ASX 200 was down 0.1%. Financial markets in Shanghai remain closed.
A barrel of Brent rose to USD101.54 on Wednesday, from USD98.37 late Tuesday afternoon. Gold declined to USD4,136.32 an ounce from USD4,163.00.
Yemen's Houthis said Wednesday they had targeted King Khalid International Airport in the Saudi capital with a ballistic missile, the latest in repeated salvos aimed at the site.
"Our armed forces have just targeted King Khalid Airport in Riyadh with a ballistic missile. The strike was accurate, by God's grace, and led to a disruption of air traffic at the airport," said Houthi military spokesman Yahya Saree in a statement on X.
In a separate post the Houthis said they also targeted an area near the airport in the interim government capital of Aden.
Wednesday's local corporate calendar has a trading statement from oil major Shell.
Wednesday's global economic calendar has German industrial production figures, the Lloyds house price index in the UK, US consumer inflation expectations data and the minutes of September's Federal Open Market Committee meeting.
By Eric Cunha, Alliance News news editor
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