The FTSE 100 is expected to edge higher on Friday, with traders in London cautiously optimistic as they continue to digest the fallout from Wednesday’s UK budget announcement.
With US markets only open for a half-day following Thanksgiving, the London stock market is likely to guide much of the early global sentiment.
Trading platform IG estimates the FTSE 100 will open about 16.6 points advanced, roughly a 0.2% rise to 9,710.53. That comes after a fairly muted session on Thursday, when the FTSE indicator managed to close just 2.35 points up at 9,693.93, slightly moving the dial.
On the currency front, the pound slipped to USD 1.3219, down from USD 1.3251 at Thursday’s close. The euro weakened slightly to USD 1.1581, while the US dollar gained modestly against the yen, rising from JPY 156.27 to JPY 156.41.
Currency shifts remain an important background for UK stocks, as investors keep an eye on how sterling’s movements impact British exporters on the FTSE 100.
Government Performs U-Turn on Employment Rights Plan
In Westminster, ministers have rowed back on their proposal to introduce day-one unfair dismissal protections for workers. Rather, the government now intends to roll out the new right after six months of employment.
This marks a clear volte-face on Labour’s fiat pledge, but officers say the change is necessary to ensure the Employment Rights Bill can pass through Congress easily.
Even so, reducing the period from the current 24 months to six is still seen as a substantial shift in UK employment law.
UK Car Production Suffers Steep October Drop
The latest data from the Society of Motor Manufacturers & Traders shows a sharp downturn for the UK automotive sector.
Vehicle production in October fell 31% year on year, dropping to 62,116 units from 89,871 units the time before.
Car manufacturing alone slipped 24% to 59,010 units, though nearly 46% of those were electric vehicles, hybrids or plug-in hybrids, highlighting the continuing move towards greener motoring.
The outlook was indeed weaker for marketable vehicles, where product crashed 75% to 3,106 units, marking the seventh straight month of decline.
This patient drop continues to weigh on the broader UK manufacturing sector and overall profitable sentiment.
US Politics Heats Up as Trump Announces Migration Pause
Across the Atlantic, political tensions escalated when President Trump said he would halt migration from what he described as “third-world countries”, following claims that an Afghan national shot two National Guard soldiers in Washington.
“I will permanently pause migration from all Third World Countries to allow the US system to fully recover,” he posted online.
He added that he plans to reverse “millions” of admissions approved under Joe Biden, and aims to remove “anyone who is not a net asset to the US.”
As for market conditions, Wall Street remained shut on Thursday for Thanksgiving and will run only a half session on Friday.
Bond Requests showed little movement, with the 10- time Treasury yield unchanged at 4.01% and the 30-year edging down to 4.65%.
Asian Markets Mixed; Commodities Move Slightly
Asian trading was subdued overnight. Tokyo’s Nikkei 225 gained 0.2%, while the Shanghai Composite rose 0.3%. Hong Kong’s Hang Seng Index slipped 0.3%, and Australia’s ASX 200 dipped slightly.
Commodities were also steady. Gold climbed to USD4,188.40 an ounce, while Brent crude eased to USD63.11 a barrel, a marginal decline, but enough to keep energy stocks in focus for today’s trading session.
In the UK corporate world, investors will be watching for half-year results from Foresight Environmental Infrastructure.
Internationally, markets are braced for fresh GDP data from Canada, as well as inflation figures from France and Germany, key indicators that could influence European equity markets and add to the broader economic picture affecting UK stocks and the FTSE 100.
