Must read: French politics, Nikkei, bitcoin, UK house prices
ii’s head of investment rounds up the morning’s big news.
7th October 2025 09:01
by Victoria Scholar from interactive investor
GLOBAL MARKETS
European markets have opened mostly flat with the CAC 40 in the red again. Departing French PM Sébastien Lecornu is in talks with various parties to try and fend off yet another political crisis. Kering SA (EURONEXT:KER) is outperforming after Morgan Stanley upgraded the stock to overweight. In the UK, the FTSE 100 is trading flat. Rentokil Initial (LSE:RTO) is outperforming after Bernstein raised the stock to outperform from underperform.
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In Asia, the Nikkei scaled fresh all-time highs for a second day, with markets excited by the prospect of a new pro-stimulus PM. Meanwhile, the World Bank upgraded its China growth forecast to 4.8% this year, up from 4% despite tariff uncertainty.
US futures look set to give back some gains after the S&P and the Nasdaq closed at record highs, thanks to a mega AI deal between chipmaker Advanced Micro Devices Inc (NASDAQ:AMD) and ChatGPT creator OpenAI. So far, markets are shrugging off the US government shutdown with AI driving price action instead.
According to the FT, OpenAI has now signed deals this year for computing power worth around $1 trillion (£740 billion). Elsewhere, Donald Trump has announced a 25% tariff on large trucks from 1 November.
Bitcoin is trading down nearly 1.5% amid profit taking from investors, after the cryptocurrency hit a fresh all-time high on Monday. It has gained around a third so far this year, propelled by an accommodative stance from the White House and US dollar weakness.
UK HALIFAX HOUSE PRICE INDEX
The UK Halifax house price index rose by 1.3% year-on-year in September, falling from 2% in the previous month. This was a big disappointment versus expectations for an increase of 2.2%. In fact, it was the weakest annual growth since April 2024. On a monthly basis, prices dropped by 0.3%, larger than expected for a drop of 0.2% and a month-on-month decline.
Today’s Halifax house price data paints a gloomier picture than Nationwide’s assessment of the UK housing market last week which estimated higher growth of 2.2% in September year-on-year and 0.5% month-on-month. However, Halifax estimates that the typical home now costs £298,184 whereas Nationwide’s third-quarter UK average price estimate is lower at £272,819.
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Even though interest rates have come down, mortgage affordability remains a headwind for the housing market, particularly amid the prospect of higher-for-longer interest rates as inflationary pressures linger.
The upcoming Autumn Budget in late November could provide some support for the housing market, although the next two months could see modest activity, with potential buyers and sellers in wait-and-see mode during this period of uncertainty. From a macro perspective, wage growth remains strong but there are pressures at home and abroad that make for an uncertain economic future that could weigh on the housing market.
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