Must read: FTSE 100 outperforms, bitcoin record, jobs data

GLOBAL MARKETS

After hitting record highs last week, the FTSE 100 is eking out a modest gain, outperforming mainland Europe. The pound is trading at a three-week low on dovish comments from the Bank of England governor Andrew Bailey. The DAX is in the red after President Trump threatened a 30% tariff on imports from the EU and Mexico from 1 August, sparking risk-off sentiment. This pushed the German 10-year bond yield to the highest level since 1 April. 

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In terms of individual movers in Europe, AstraZeneca (LSE:AZN) shares are at the top of the FTSE 100 following the success of its blood pressure drug Baxdrostat in a late-stage study. Fresnillo (LSE:FRES) is trading sharply higher too thanks to a rally in precious metals. 

The United States looks set to follow Europe into the red with Dow, S&P and Nasdaq futures all trading around half a percent lower. In Asia, markets were mixed with the Nikkei in Japan lower and yields on Japanese government bonds (JGBs) at a seven-week high amid jitters around the upcoming election.

In commodities, oil is extending Friday’s gains with brent above $70 a barrel fuelled by the potential for further US sanctions on Russia. Oil investors await the latest from Donald Trump who said he’s planning a ‘major’ statement on Russia today. 

In precious metals, gold is trading at a three-week high and silver is also in the green as investors seek out safe havens amid Trump’s trade war uncertainty.

BITCOIN

Bitcoin has topped $120,000 for the first time. It hit a high overnight of $122,571.19. It has since pulled back slightly but remains higher on the day by around 2.5%. Other cryptocurrencies are rallying with it.

Over the last year bitcoin is up by more than 100% against the US dollar, having gained 15% over the past month and 30% year-to-date. 

Trump’s presidency has provided a major tailwind to the crypto complex thanks to his frequent, vocal, vote of confidence in the asset class. The passing of his ‘big beautiful bill’ has helped spur gains for bitcoin. 

Plus, Congress is voting this week on the Genius Act, the Digital Asset Market Clarity Act, and the Anti-CBDC Surveillance State Act. The passing of these acts would help provide a boost for digital assets and their proliferation in the economy.

UK LABOUR MARKET

According to the KPMG/REC labour market report, Britain’s jobs market suffered a significant slowdown in June. According to the recruiter survey, the index of staff availability rose to 66.1 from 63.3 in May, reaching the highest level since November 2020. KPMG says this is driven by geopolitical turbulence and concerns about technological efficiency. 

With so much domestic and international uncertainty, employers are clearly feeling nervous about taking on the additional fixed costs of permanent staff, waiting for some of the unknowns to pass by. Alongside the tensions in the Middle East and Trump’s tariff war, businesses are unsure what to expect from the Chancellor in terms of tax changes ahead. Employment has already taken a hit following the rise in National Insurance Contributions and the increase to the minimum wage. Plus the rapid ascent of AI is likely to boost workplace efficiencies with the potential for companies to save costs and reduce headcount. 

Friday’s disappointing GDP figures, combined with these weak jobs data, boost the case for the Bank of England to cut interest rates in August. The central bank’s governor Andrew Bailey told The Times ‘slack’ was opening up in the labour market, and he believes ‘the path is downward’ for interest rates. 

All eyes are on Wednesday’s inflation report with CPI expected to remain at remain around 3.4% in June, roughly unchanged for the third consecutive month.