Markets brief
Gilt Yields Ease and FTSE Pauses Weekly Plunge
London equities and sovereign debt found temporary respite after a turbulent week pushed UK borrowing costs to multi-decade peaks.
Markets
Fixed-income buyers stepped in after 30-year yields breached 6% — halting the sharpest UK gilt rout since 1998.
BackgroundGilts reflect the cost of UK sovereign borrowing and anchor domestic commercial lending rates, mortgages, and corporate credit. Persistent domestic inflation concerns and conflict-driven fuel spikes had triggered an aggressive bond sell-off across European markets.
- Benchmark 10-year gilt yields eased by 4 to 6 basis points to 5.36% after earlier reaching levels unseen since July 2007.
- The 30-year gilt yield retreated below 6.0% after breaching that threshold for the first time in 28 years on Thursday.
- Two-year gilt yields slumped 12 basis points to 4.688%, logging their sharpest single-day recovery since mid-September as policy tightening bets softened.
Markets
A weak US jobs report gave the FTSE a relief bounce — but could not prevent its worst weekly slide since April.
BackgroundThe FTSE 100 contains prominent international resource extractors, dividend-paying defensives, and domestic commercial lenders. Rising gilt yields across maturities had pulled capital out of London equities during a multi-day sell-off in sovereign bonds.
- The blue-chip index fell 2.18% over the week (down 233.3 points) as surging government yields hit sensitive defensive sectors.
- A weaker US payrolls print of 29,000 jobs versus 90,000 expected cooled monetary tightening bets, sparking a broad relief rally across European equity desks.
- Mining equities supported Friday's recovery as Glencore gained 3% on firming commodity prices, while mid-cap FTSE 250 shares advanced 0.2% to 24,194.
Markets
Oil dropped back toward $100 after the G7 tapped stockpiles — defusing an acute diesel spike before it broke European haulage margins.
BackgroundCrude oil benchmarks surged past $100 per barrel following Middle Eastern conflict escalations and refinery bottlenecks across the Atlantic. Soaring diesel prices threatened to reignite European transport cost inflation and squeeze consumer real disposable incomes.
- Brent crude settled down to $102.25 a barrel, paring intra-week highs above $105 that were triggered by regional supply disruption fears.
- US West Texas Intermediate slipped 1.9% to trade at $91.11 a barrel as prompt supply risk eased across global hubs.
- Front-month distillate crack spreads compressed as European and American refiners prepared to process released reserve volumes over the coming weeks.
Markets
Softer US jobs figures halted sterling's slide — but underlying fiscal jitters will keep the pound vulnerable into the Budget.
BackgroundSterling trades as a barometer of UK macroeconomic health and relative sovereign bond yield expectations. Elevated inflation expectations and surging gilt yields had weighed heavily on the currency, driving it toward late-June trading levels.
- The pound gained 0.2% to $1.3226 on Friday after sliding to $1.3193 during Thursday's bond sell-off across UK maturities.
- The US dollar index slipped to 101.89 following the soft 29,000 nonfarm payrolls print, relieving immediate selling pressure on sterling cable pairs.
- Sterling strengthened against the single currency to trade around EUR1.1739 as European currency desks absorbed wider French sovereign debt divergence.
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