UK equities pushed higher on Friday after disappointing U.S. labour market data strengthened expectations that the Federal Reserve may ease its approach to interest rates.
The FTSE 100 gained 0.29% by 03:23 ET, while Germany’s DAX rose 0.75% and France’s CAC 40 added 0.30% as European markets absorbed the softer American data.
Sterling firmed 0.16% against the U.S. dollar to $1.3367, benefiting from broad dollar weakness following the release of the payroll figures.
U.S. exchanges remained closed for the Independence Day holiday, leaving European markets operating with reduced liquidity and the potential for heightened afternoon volatility.
The U.S. economy created just 57,000 nonfarm payroll jobs in June, falling well short of economists’ expectations of 113,000 and signalling a marked slowdown in hiring momentum.
Employment figures for both April and May were also revised lower, adding further weight to evidence that the American labour market is cooling more quickly than anticipated.
Although the unemployment rate edged down to 4.2%, analysts attributed the decline largely to lower labour force participation rather than any meaningful improvement in hiring conditions.
Geopolitical uncertainty also remained in focus after negotiations between the United States and Iran were temporarily suspended following the death of former Supreme Leader Ayatollah Ali Khamenei, whose body arrived at Tehran’s Grand Mosalla complex on Friday.
Official funeral ceremonies are scheduled to run from 4 July through 9 July, with Iranian officials expecting between 15 million and 20 million mourners to attend the commemorations.
Mediators from Qatar and Pakistan confirmed that diplomatic discussions would resume “at the earliest possible time” once the funeral proceedings have concluded.
Iran’s Revolutionary Guard leadership issued warnings to both the U.S. and Israel against carrying out any military action during the funeral procession, while Washington confirmed a second Marine unit of more than 2,000 personnel has been deployed to the region.
Shipping activity through the Strait of Hormuz showed signs of partial recovery, reaching at least 258 vessel movements last week compared with 138 the week prior, though traffic remains far below pre-conflict levels of around 130 ships per day.
On the domestic political front, prime minister-in-waiting Andy Burnham told LBC’s Andrew Marr that he planned to increase business rates on large out-of-town warehouses to fund a 20% reduction in rates for high street retailers.
“I believe there is a case for higher business rates on warehouses,” Burnham said, while also reaffirming his commitment to Labour’s 2024 manifesto pledges on income tax, VAT and national insurance.
Burnham declined to name his preferred chancellor ahead of his expected confirmation on 20 July, keeping speculation alive as the political transition continues.
In commodity markets, Brent crude rose 0.32% to $72.03 per barrel and WTI crude gained 0.10% to $68.76, while gold futures surged 1.39% to $4,183.65 an ounce as the weaker dollar boosted demand for the precious metal.