FTSE 100 Highest in a Year. NFP Released Today

Equities

On Thursday, the FTSE 100 climbed 0.5%, marking its highest close since February 2023, buoyed by the performance of auto stocks and mining shares. This upswing was further supported by data suggesting that the British economy might soon emerge from recession. Notably, the automobiles and parts index saw a 2.4% rise following reports that Britain's new car market had its best March since 2019, propelled by steady demand for fleet vehicles. Additionally, precious metal miners enjoyed a 1.4% increase as gold prices reached new heights, and industrial metal miners rose 1.6% with copper prices hitting a 14-month peak.

Future Plc led the FTSE midcap index with a nearly 16% surge after the media firm indicated expectations of returning to organic revenue growth in the second quarter. Conversely, Ocado saw a 5% decrease after announcing that Chairman Rick Haythornthwaite would step down next year due to increasing commitments at NatWest, which itself enjoyed nearly a 3% gain.

Across the Atlantic, US stock indices fell with the Dow Jones, S&P 500, and Nasdaq falling 1.35%, 1.23%, and 1.4% respectively. This was largely attributed to cautious comments from Federal Reserve officials regarding the outlook for interest rate cuts and anticipation of the US monthly jobs report. Among specific sectors, technology stocks led the declines with a 1.7% drop, whereas defence-related shares like Lockheed Martin bucked the trend with gains.

Significantly, Levi Strauss reported a 12.4% jump in its share price after raising its annual profit forecast, citing benefits from cost-cutting measures and reduced discounts. This upbeat announcement came amidst a broader market retreat, driven by investors' reactions to Federal Reserve officials' remarks and geopolitical tensions affecting oil prices.

Forex & Commodities

The upcoming US jobs data is highly anticipated for further clues on the labour market and inflation, with the market still expecting a near 60% chance of a rate cut in June, according to the CME Group's FedWatch tool.

The US dollar reached a two-week low, influenced by expectations of imminent interest rate cuts, while economic data indicated a slowdown in services growth. This shift encouraged speculation about reduced rates, although Federal Reserve officials, including Minneapolis Fed President Neel Kashkari and Richmond Fed President Thomas Barkin, have expressed cautious views on the necessity and timing of such cuts.

In currency movements, the yen showed resilience, partly due to comments from BOJ Governor Kazuo Ueda hinting at possible monetary policy responses to significant exchange-rate fluctuations affecting inflation and wages. The Swiss franc declined against the dollar following reports of lower-than-expected inflation in Switzerland, hinting at potential rate cuts by the Swiss National Bank.

The euro gained against the dollar after softer-than-expected European inflation data, suggesting a possible European rate cut in June. Similarly, the Australian and New Zealand dollars strengthened, with market expectations leaning towards rate cuts in New Zealand by August and a stable rate in Australia until November.

Gold prices consolidated near an all-time high, driven by anticipation of US rate cuts, while oil prices surged due to geopolitical tensions and production cuts, closing at their highest since October. Brent futures and US West Texas Intermediate both experienced significant gains