Traders Brace for UK Budget, Yen 10-Month Low

The yen held at 156.6 per dollar on Monday as traders watched for possible intervention during the thin US Thanksgiving trading week, while sterling traded around 1.310 ahead of Wednesday’s UK budget, with the FTSE 100 off its highs. Although US indices rebounded on Friday they were lower for the week - and symbolic of the AI-led sell-off, Nvidia closed 1% lower on Friday despite reporting strong results on Wednesday.

Equities

The FTSE 100 recovered some ground on Friday afternoon, closing higher on the day but still ending the week down 1.7%. The mid-cap FTSE 250 slipped 0.1% on Friday and logged weekly losses of 2.2%.

Sentiment was mixed across sectors. Beverages stocks rose 2% on the day, and homebuilders gained 3.4% after edging higher late in the session. Aerospace and defence names fell 3.2% to a three-month low on Friday as investors assessed reports of a US-drafted proposal aimed at ending the war in Ukraine. Precious-metal miners dropped 2.2%, while industrial metal miners lost 1.8% after copper prices reached a two-week low.

ASOS fell 5.3% on Friday after the fast-fashion group said annual profit would be lower than analysts had forecast. The company’s update pointed to continued pressure on margins and demand, which pushed the shares sharply lower over the session.

In the United States, the S&P 500 closed up 1% on Friday, the Dow rose 1.1% and the Nasdaq added 0.9%. These gains helped limit what was otherwise a negative week, with the Dow down 1.9%, the S&P 500 down 2% and the Nasdaq lower by 2.7%. The Nasdaq’s decline marked its third straight weekly fall.

Nvidia briefly jumped during Friday’s session after reports that the Trump administration may permit sales of the firm’s H200 artificial-intelligence chips to China. The share price later reversed and closed 1% lower on Friday, leaving it down 5.9% for the week, even after the company issued strong quarterly results and a confident forecast late on Wednesday.

Alphabet rose 3.5% on Friday, helping lift the technology sector after a volatile few days. Apple gained 2% on the day, while Meta closed 0.9% higher. These moves added support to broader indices heading into the weekend.

Eli Lilly rose 1.6% on Friday after becoming the first drugmaker to hit a $1 trillion market capitalisation during the session. Demand for its weight-loss medicines continued to underpin the stock’s momentum.

Forex & Commodities

The US dollar held steady at 100.15, while traders assessed the possibility of yen intervention in light trading. The yen was unchanged at 156.5 per dollar after Tokyo’s holiday, with officials in Japan signalling that direct action in the currency market remains on the table.

Sterling traded at 1.310 against the dollar ahead of Wednesday’s UK budget, where the Chancellor aims to balance support for growth with fiscal restraint.

The euro was stable at 1.152 against the dollar on Monday, showing little response to renewed discussions on Ukraine’s peace framework. The New Zealand dollar traded at 0.5609 as markets looked ahead to Wednesday’s Reserve Bank of New Zealand decision, with expectations for a rate cut. The Australian dollar held at 0.6460 ahead of inflation data due this week.

Spot gold was steady at 4086 per ounce on Friday afternoon after falling earlier in the session. Traders lifted expectations for a December US interest rate cut following comments from New York Fed President John Williams, who said there was scope to lower borrowing costs in the near term. Silver traded at 50.39 per ounce on Friday, while platinum stood at 1513 per ounce and palladium at 1380 per ounce.

Oil prices eased slightly on Monday after last week’s decline. Brent crude traded at 62.53 per barrel early in the morning, while West Texas Intermediate stood at 57.99. Markets continued to assess progress on a revised Russia-Ukraine peace proposal that could lead to changes in sanctions on Russian producers, including Rosneft and Lukoil, after US restrictions on their exports came into force on Friday.