- FTSE 100 up 174 points at 10,652
- Three-month high for the UK blue-chip index
- European markets up, US futures down
- Currys falls as new buyback disappoints
5.05pm: Winning day
London stocks finished the day strong, up 174 points at 10,652 after a weaker-than-expected payrolls report out of the US.
“It might the US that’s looking forward to a long weekend, but European markets have got in on the act today following the payrolls data,” IG chief market analyst Chris Beauchamp said.
“The weaker figure sent the dollar reeling and saw Fed rate hike bets reined in. As a result, the Vix slumped and European markets took off, most notably the Dax, which saw its first record high in six months.
4.07pm: Highest since Iran war
The FTSE 100 keeps going, now up over 200 points to the highest since the Iran war broke out.
This would be the second 200-plus day for the index since the US and Israeli strikes began, with the last being on 23 March when markets surged on hopes of a de-escalation following comments from President Trump.
This isn't one of those days when the rising tide is carrying all boats higher, there's still 20 companies in the index in the red. Leading those names is Polar Capital Tech Trust, Computacenter, Entain and JD Sports, all down between 2.8% and 1%.
3.38pm: Dollar drops, European stocks and gold surge
Off the back of the US non-farm payroll report, economist James Knightley at ING says the numbers "suggests that this was not necessarily the start of a new trend and takes some out of the wind of the sails for the call for imminent rate hikes".
However, he says Fed chair Kevin Warsh "has made it clear that inflation is the Fed's focus right now, so market reaction is somewhat muted".
The market is now pricing 31 basis points of cumulative hikes by December, down from 37bps just before the data was published.
Consumer price inflation data coming later this month "should" show month-on-month prices falling due to the steep drop in gasoline prices, says Knightly, which "will likely have more of an impact on investor psychology".
He says ING continues to expect a "prolonged pause from the Federal Reserve rather than expect a 2026 rate hike".
Clearly other markets have move sharply, and more than Wall Street stocks, as a result, one being the dollar.
The pound is up 0.66% and the euro up 0.55% as the greenback has slipped, while in Europe the German DAX has surged 2.3% compared to the 1.7% jump for its London counterpart.
Fed rate hike bets being reined in "sent the dollar reeling", says IG's Chris Beachamp, with the VIX volatility index slumping and European markets taking off.
After Warsh’s hawkish talk in recent weeks caught the market on the hop, "any sign that the Fed may not have to rush to increase borrowing costs naturally spells good news for equities around the globe".
Another market to get a boost has been gold, up 2.1% to $4118 an ounce, in line with the weaker dollar.
Says Beachamp: "A weaker dollar makes life much easier for the dip buyers, though sentiment has been heavily battered by the repeated false dawns of the long retreat from $5000."
With inflation expectations dropping back, "the outlook seems much more promising than in the past three months".
3.17pm: Defence, defensives and miners power FTSE higher
What's behind the surge in London stocks, which is very much with blue-chips more than mid-caps, with the FTSE 100 up over 1.5% versus a 0.4% rise for the FTSE 250.
It's the highest since a spike in mid-April. The FTSE 100 hit its all-time back in February, when it topped off at just above 10,910.
The defence sector is top of the Footsie leaderboard, with BAE Systems and Babcock both up more than 6%, while aerospace names Melrose and Rolls-Royce also advancing.
There are also strong moves for defensive heavyweights including AstraZeneca, GSK, Tesco and Haleon.
A rebound in miners, led by Antofagasta, and gains for banks and utilities has added to the momentum, with investors sparked into a rotation after the US jobs report.
The weaker dollar and softer oil prices have perhaps helped to underpin sentiment, easing some concerns about the outlook for interest rates. US Treasury yields, especially for shorter-term debt, have dropped.
2.47pm: Dow Jones opens near record high, FTSE rocketing
The FTSE 100 is rocketing higher, after the US jobs report miss and a positive open for US stocks, with the Dow Jones striding 0.8% higher to 52,709, not far off yesterday's intraday record.
The S&P 500 has gained 0.6% and the Nasdaq has inched up 0.4%.
Top of the Dow leaderboard is Nike, rebounding from yesterday's earnings-inspired drop.
Then comes Boeing, Visa, Chevron, Apple and Amazon, all up over 1%.
2.05pm: US futures rise, FTSE surges
Wall Street futures have climbed higher ahead of the opening bell, thanks to the boost from today's payrolls report.
Dow futures are up 0.4%, while the S&P 500 and Nasdaq futures are indicating a rise of around 0.3%.
Market analyst Fazad Razakzada at Capital.com says: "The stock market liked the data and the dollar hated it because it effectively rules out the chances of a July rate hike from the Fed – not that this was going to happen anyway with oil prices falling."
But then he asks if the NFP was "enough" of a disappointment to completely rule out rate hikes later this year?
"Absolutely not. One month’s worth of data will never be enough. The Fed’s focus is on inflation, meaning the jobs data should taken with a pinch of salt for any dollar bears out there.
"Still, with oil prices going further below the pre-war levels, risk appetite should remain firm – barring further selling in the AI and chipmaker sectors."
Now that the US jobs data has come in much softer, he says it also gives Japanese authorities "even more reason to use the opportunity to sell more of its dollar reserves to help lower the USD/JPY exchange rate. This is especially the case given the US holiday on Friday when liquidity conditions will be a lot thinner, amplifying the impact of any intervention."
Looking ahead, he says the US public holiday on Friday "means the bulk of the post NFP moves may well happen today".
13.38pm: US jobs report
The June US non-farm payrolls came in below forecast, with just 57K new jobs compard to the 115K expected.
What's more, the previous month was revised lower too.
The unemployment rate fell to 4.2%, partly driven by a drop in the participation rate.
US futures have picked up, with all three major indices now expected to open higher, as it essentially rules out the chances of a July rate hike from the Fed.
12.40pm: Burnham budget watch
UBS economists believe an Andy Burnham government may ultimately have to loosen the UK's fiscal rules as rising defence and energy spending collides with Labour's ambitions for higher investment and regional growth.
Economist Anna Titareva believes ministers are "likely to explore flexibility within the fiscal rules, especially those related to capital spending", rather than day-to-day expenditure.
The prospect raises the stakes ahead of the Autumn Budget, which Titareva expects to take place in November.
Discussions over tax rises are likely to re-emerge, she says, as the government looks for ways to fund additional spending commitments.
"To us, a key question is whether, amid all the pressures, Mr Burnham will stick to his predecessor's promise of not increasing income tax, VAT, or corporation tax."
The economist also highlights the scale of the defence challenge, noting that £4.7 billion of the recently announced £15 billion increase in military spending still lacks a clear source of funding.
12.09pm: CMC up 57% this week
CMC Markets shares are up another 8% today, or almost 57% so far this week, after the trading platform upgraded guidance yesterday.
Jefferies, for example, has today sharply increased its forecasts, lifting 2027 pre-tax profit estimate by 56% and raising its price target to 730p from 520p.
Analyst Julian Roberts says management's new income guidance reflected strong momentum in the B2B business and notes that there had already been "room for upside in the old guidance".
He expects pre-tax profit to reach £235 million in the 2027 financial year, up from a previous forecast of £151 million, and sees further upside as major partnerships with Westpac and ASB Bank come on stream, potentially doubling CMC's B2B2C customer base Down Under.
11.47am: Mortgage rates still above 5.5% but edging lower
After the Bank of England's Credit Conditions survey earlier pointed to a further (slight) easing in mortgage lending conditions, fresh market data this week shows average UK mortgage continuing to edge lower.
Moneyfacts data shows both two-year and five-year fixed deals slipping to 5.51% from 5.52%.
That’s down from 5.68% for a two-year mortgage at the start of June, and 5.63% for a five-year.
Remember that the average two- and five-year fixed mortgage rate was last below 5% before the war in Iran saw a spike in borrowing costs.
Rates had first fallen below the 5% threshold in late 2025.
11.26am: European stocks on the rise, US futures down
The FTSE is in a holding pattern, but mainland European stock markets are continuing to rise, while the dollar falls ahead of the monthly US jobs report and a holiday-shortened week on Wall Street.
US futures remain in the red, led by a 00.5% drop for the Nasdaq.
July has "begun on a bit of a bum note for the AI trade," says Neil Wilson at Saxo, pointing to the "brutal selloff" in semiconductors and AI-related hardware stocks overnight, which hit some Asian equities too, Korea's Kospi down 8% for example.
The Footsie is being held back by tech funds, miners and housebuilders.
Oil prices are softer, with Brent hovering just above $70 handle, with Wilson noting that Qatar reported progress on shipping in the Strait of Hormuz.
On the US jobs data, Wilson says the June print is expected to come in at 110k, down from the 172k new jobs added in May, while the unemployment rate is seen holding steady at 4.3%.
"The jobs data will help guide market pricing for US rates in light of the newly hawkish FOMC."
Speaking in Sintra, Portugal yesterday, Fed Chair Kevin Warsh said inflation expectations have eased, but reaffirmed the Fed’s commitment to restoring price stability, and said that the FOMC will "have a good family fight" at the July FOMC meeting.
Wilson says: "The regime shift to a more forceful and proactive Fed has only just begun and the market remains stuck in the mode of the FOMC requiring a lot more convincing evidence than already exists. Treasury yields have risen in the last couple of days ahead of the jobs report and off the back of Warsh’s reiteration of his commitment to price stability."
10.42am: Spotlight on Curry's TVs
More on Currys, where CEO Alex Baldock told BBC radio this morning that global memory shortages will mean some price rises for consumer electrical products:
“AI and data centres are eating up the world’s supply of silicon, leaving less for the likes of mobile phones and laptops which does create availability challenges and will produce some cost price inflation.
“Inevitably there are going to be some price rises but we’re in a pretty good position to dampen that as much as possible.”
Investors do not seem entirely happy this morning, and analysts earlier said that the size of the buyback might have been an issue.
The chip shortage links to something that Dan Coatsworth at AJ Bell flags, which is that the results come after Apple’s recent price hikes on multiple products, which has implied that other electronics items could become more expensive as manufacturers seek to pass on higher raw material costs.
"That creates an element of uncertainty in terms of consumer ability or willingness to buy more expensive items," says Coatsworth.
He also saw an angle to last night's Harry Kane-inspired comeback win, saying that "there’s nothing like an edge of your seat England game at the World Cup to make people want to upgrade their TV to have a bigger screen.
"Many sports fans have already upgraded their TV for the tournament, and England’s nail-biting victory against DR Congo could keep the tills ringing for Currys if it shifts more tellies."
It's often been seen before that electrical retailers (and pubs) typically see a sales boost from big sports tournaments.
TVs have been central to Currys’ recent TV advertising campaign, Coatsworth notes, though the company reported a "soft" TV market in the past year, "so a World Cup-related sales boost would provide relief on this front".
10.20am: Currys stumbles after 'conservative' buyback, say analysts
Broker reaction to Currys has been positive, but the shares are down 4% to 157.1p.
Analyst Wayne Brown at Panmure Liberum points to "very strong" annual results, a cash-rich balance sheet and scope for further shareholder returns.
He says the group now has "clear tailwinds", highlighting strong growth in iD Mobile, rising recurring revenue and the prospect of an AI-driven replacement cycle supporting demand.
Peel Hunt's John Stevenson describes the figures showing a "clean handover" to incoming chief executive Fredrik Tønnesen.
Given the £176 million net cash position, he feels the £50 million buyback and cash dividends of £35 million, given further forecast cash generation, "feels conservative".
"A strong balance sheet brings optionality, but in lieu of any M&A (which also feels unlikely), we suspect the buyback may be reloaded at the interims."
Stevenson flags good trading across all categories in the new year, with stock levels higher as Currys "has deliberately loaded up on laptops and computing stock in the face of rising chip prices (inventory increased by £140m), which will carry current-priced supplies into the back-to-school and autumn periods".
Overall, "a solid set of results, with potential for forecast upside and further buybacks", he says, noting the shares trade at 11 times forecast earnings.
9.34am: BoE credit conditions
The Bank of England's latest credit conditions survey points to a further easing in credit conditions, but with early signs of strain emerging among households.
Banks reported a smaller increase in the availability of mortgage and corporate credit and expect lending conditions to loosen more slowly in the coming months.
At the same time, lenders reported rising defaults on unsecured borrowing and expect those arrears to increase further, suggesting pressure is building on some household finances.
A net balance of -16.5% of banks reported that the changing economic outlook reduced their secured credit availability in Q2.
Rob Wood at Pantheon Macroeconomics says: "Growth will be supported by further easing of credit conditions, as banks' rising appetite for risk partly offsets caution caused by the Iran War.
"In any case, the survey overplays banks’ caution, because the sample period ended just when the ceasefire extension between the US and Iran was finally agreed, meaning that oil prices were above $100 a barrel during a decent part of the period.
"Banks still raised secured and unsecured household credit availability in Q2. The tightening expected in Q3 will probably be avoided now that economic risks have receded."
Wood points to the survey suggesting some strength in lending flows was driven by front-running of interest rate changes, with demand for secured household credit rising strongly in Q2 but expected to fall in Q3.
"Curiously, a majority of banks reported falling demand for funds from corporates of all sizes despite the almost booming hard data on bank lending to firms."
There is also "a warning sign to watch" in unsecured household credit defaults, with the largest net percentage of banks reporting rising defaults on unsecured loans to households since 2009.
"This comes after an extended period of stable defaults, so it is not a major red flag just yet.... But the data nonetheless pose a risk to households' ability to continue smoothing through the energy shock, as they did in Q1 by raising spending solidly despite falling real income."
9.13am: FTSE and European markets climb
The FTSE 100 is surging higher now, led by drugmakers, banks and defensive consumer-facing names.
After just over an hour, the index is up 48 points at 10,526.
Caterer Compass, grocer Tesco, consumer good makers Haleon, Reckitt and Diageo were among the biggest risers, while AstraZeneca and GSK also provided support.
Defence contractors Babcock and BAE are adding to the gains.
European markets are broadly firmer, with France's CAC 40 and Italy's FTSE MIB both up 0.6%, while German and Spanish benchmarks see more modest advances, and the Euro Stoxx 50 is hovering around the flatline.
The DAX is up just 0.3% after an overnight reform package was agreed by the German government.
It is "one of its biggest reform packages in decades, spanning moderate income tax relief, pension reform, more flexible labour laws and a reduction in red tape," says Marion Mühlberger at Deutsche Bank.
She says the government is delivering on one of its key electoral promises, namely tax relief for low- and middle-income earners, but is also pushing through "important structural reforms, including adjustments to the pension system and more flexibility in labour laws".
"The reform package shows that both coalition partners were willing to compromise and that the government is embarking on structural reforms to be implemented by year-end. This should bode well for sentiment and dovetails with our forecast that growth will pick up in the second half of the year."
8.55am: Baltic guidance disappoints
Biggest mover on the FTSE 350 this morning is Baltic Classifieds Group, down 8.8% after management issued lower-than-expected guidance for the 2027 financial year, overshadowing annual results that were broadly in line with forecasts.
Analyst Jessica Pok at Peel Hunt said she expects a "3-4% downgrade" to its revenue and EBITDA estimates after the company guided to 10% revenue growth and an EBITDA margin in the mid-70s.
She says there could be "some disappointment" from investors, given the guidance.
"However, this has been offset by the continued buyback, which we expect will be accelerated in FY27E to support EPS and share price momentum."
8.37am: Defence black hole
One of the big economic stories in the papers this morning is the defence spending headache in store for PM-in-waiting Andy Burnham.
The Times says the funding gap created by Keir Starmer's pledge is closer to £11.5 billion after Downing Street admitted departments have not identified the cuts needed to pay for it.
The Telegraph puts the hole at £15 billion.
Both figures are a long way above the £4.7 billion that Downing Street was briefing yesterday.
8.15am: FTSE 100 concedes early
The FTSE 100 has bounced around in early trades like an England fan's emotions last night, falling then rising.
Within fifteen minutes, the English index is down, like against Congo, though in this case around 4 points at 10,474.6.
Biggest fallers include tech investors Polar Capital Tech Trust and Scottish Mortgage, down 2.3% and 1.6%, followed by RELX, Spirax, HSBC and Standard Chartered, all down over 1%.
Around 1.14 points are attributed to a handful of stocks trading ex-dividend, namely retailer Next, JD Sports, Games Workshop and F&C Investment Trust.
Who is this morning's Harry Kane? Grocers Sainsbury's and Tesco's are top of the risers, along with Associated British Foods, all up around 1.8%.
7.55am: More Halma deals
Halma has struck a pair of healthcare acquisitions worth a combined £54 million, extending its dealmaking spree after its biggest ever year for acquisitions.
The FTSE 100 safety equipment group says it has acquired Dutch hospital software business Itemedical for €23 million (about £20 million), and Sweden's Naslund Medical for $45 million (about £34 million). Both deals will be funded from existing facilities.
Group chief executive Marc Ronchetti said: "These acquisitions strengthen our existing companies by adding complementary capabilities in markets they know well, supporting their long-term growth while enabling improved patient outcomes."
7.48am: Currys serves up tasty returns
Currys has doubled its dividend and unveiled a new £50 million share buyback as the electricals retailer posted profits in line with previous guidance.
Adjusted pre-tax profit for the year to 2 May jumped 18% to £191 million, on revenue up 6% to £9.25 billion, in line with previous guidance.
Overseeing his last set of results before leaving next month, CEO Alex Baldock said trading at the start of its new financial year had been "very solid".
The board is "comfortable" with current market expectations, where the mid-point is an adjusted pre-tax profit of £198 million, despite continued macroeconomic uncertainty.
7.28am: Genel buys Capricorn
Genel Energy has agreed to buy fellow London-listed oil and gas producer Capricorn Energy in a recommended cash deal valued at around $360 million.
Genel will pay $4.74 for each Capricorn share, comprising $3.75 in cash plus a special dividend of $0.99, expected to be declared before completion.
The offer represents a premium of about 34% to Capricorn's closing on 10 March, the day before the offer period began.
Capricorn, formerly Cairn Energy, has been listed in London since the 1980s.
FTSE 100 Live pre-open
The pattern seems to be that every day in recent weeks, London's blue-chips are predicted to fall at the open, and today is no different.
The FTSE 100 has been called 19 points lower on the futures market, having lost the same amount of points yesterday when trading closed at 10,478.34.
Wall Street also finished lower overnight, with the Nasdaq bearing the brunt of the selling, down 0.7%, while the S&P 500 finished down 0.2% and the Dow Jones losing just 14 points or 0.03% after hitting an all-time intraday high during the session.
Asian markets are mixed this morning, with South Korea's Kospi slumping more than 6%, Japan's Nikkei falling 2% and China's Shanghai Composite down 1.4%, while Hong Kong's Hang Seng, India's Sensex are both higher.
US futures are in the red too, with the Nasdaq again at the forefront, down 0.3%, with futures for both other majors just below flat.
Oil prices have continued to fall, with Brent crude down 1.2% at $70.74 a barrel, the lowest since late February.
The pound is at close to a two-week high against the US dollar, ahead of the big US non-farm payroll data which is coming later today, as the usual Friday date is blocked off by the Independence Day holiday tomorrow.
Around 114K jobs are expected to have been added in June, with monthly wage growth remaining steady at around 0.3%, while annual wage growth could edge up from 3.4% to 3.5%.
"Given the Fed’s explicit emphasis on inflation and price stability, any pickup in wage growth could revive hawkish Fed expectations and push US yields higher, pressuring equity valuations at a time when questions around the technology rally are getting louder," says market analsyt Ipek Ozkardeskaya at Swissquote.
"The good news is that the reason inflation picked up momentum – the Iran war-led spike in energy prices – has largely faded. But the bad news is that if we see a correction in the technology complex, the rest of the index may find it hard to reverse the tide."
