Yen Stabilises, FTSE Rebounds from 3-Month Low

European and US stock futures are pointing higher as markets stabilise after a volatile week with the FTSE 100 looking to rebound further from a 3-month low. The yen settled around 154 per dollar following intervention and speculation of a Bank of Japan rate hike. US GDP growth exceeded expectations in data released Thursday, providing some support for the dollar despite ongoing bets on a September Fed rate cut.

Equities

The FTSE 100 rose by 0.4% on Thursday, rebounding from a three-month low. This uptick was largely driven by strong earnings from Unilever and British American Tobacco. Unilever surged 6.2% to a near four-year high after beating profit estimates for the first half of the year, bolstered by resilient pricing. British American Tobacco gained 5.3% as it surpassed profit forecasts for the first half and highlighted some positive developments in its key US business.

Gold miners Fresnillo and Endeavour Mining fell by over 4.1% and 7%, respectively, as gold prices hit a two-week low. Centamin dropped 7.7% following its interim results, while Centrica declined 9.9% after announcing a fall in first-half adjusted operating profit.

In the US, the S&P 500 and Nasdaq Composite both ended lower on Thursday, continuing the losses from the previous day’s tech sell-off. The S&P 500 fell by 0.51%, closing at 5,399.22 points, while the Nasdaq Composite dropped 0.93%, ending at 17,181.72. The Dow Jones Industrial Average, however, rose 0.20% to 39,935.07, boosted by stronger-than-expected GDP data showing 2.8% growth in the second quarter.

IBM shares jumped 4.3%, boosting the Dow, after the company beat second-quarter revenue estimates and raised its annual growth forecast for its software business. Ford plummeted 18.4% after its second-quarter adjusted profit missed estimates. Edwards Lifesciences tumbled 31.3% following a miss on second-quarter revenue estimates. Meta Platforms, Microsoft, and Nvidia all saw declines between 1.7% and 2.4%, while Alphabet's shares fell 3.1% for a second consecutive day. Tesla bucked the trend, rising after its earnings report.

Small-cap stocks performed well, with the Russell 2000 rising 1.3% and the S&P Small Cap 600 up 1.4%, as investors shifted focus away from mega caps. American Airlines saw a 4.2% rise after cutting its annual profit forecast, while Southwest Airlines climbed 5.5% after announcing changes to its seating arrangements. In logistics, Old Dominion rose 5.7%, and J B Hunt increased by 4.3%, helping the Dow Jones Transportation Average gain 1.3%. Trading volume on US exchanges was 13.23 billion shares, higher than the 11.60 billion average over the last 20 trading days.

Forex & Commodities

The yen slipped from its 2-1/2-month peak against the US dollar on Thursday as markets stabilised. As of now, the yen is slightly down at 153.84 per dollar. Meanwhile, the dollar trimmed losses against the yen and euro after US GDP data showed stronger-than-expected growth of 2.8% in Q2, and jobless claims fell unexpectedly to 235,000.

The futures market now prices a 67.2% chance of a Bank of Japan rate hike next week, up from 40% earlier. The euro edged up to $1.0846, and the dollar index remained flat at 104.36. Against the Swiss franc, the dollar dropped 0.5% to 0.8806 francs.

Gold firmed up by 0.3% to $2,370.62 per ounce ahead of key US inflation data but is set for a weekly loss of over 1%. US gold futures rose 0.8% to $2,371.30. Spot silver fell 0.7% to $27.77 per ounce, and platinum gained 0.5% to $937.80. Both metals are on track for a third consecutive weekly fall. Palladium rose 0.9% to $914.90.

Oil prices showed slight gains but are on track for a third straight week of decline due to weak demand in China and expectations of a ceasefire deal in Gaza. Brent crude futures rose 0.2% to $82.49 per barrel, and US West Texas Intermediate crude increased 0.2% to $78.41 per barrel. Over the past three weeks, Brent has fallen about 5%, with WTI down more than 2%.