BoE slows QT, Fed cuts rates:

Image Source: Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.12% on 18 September 2025.

Macro Update: The UK faces a complex backdrop: the Bank of England is expected to slow quantitative tightening from £100bn to around £67.5bn while keeping rates on hold at 4%, as bond volatility and inflation at 3.8% weigh on policy. Donald Trump’s second state visit brought pomp and a £150bn U.S. investment deal with Britain, though Epstein-related scrutiny lingers. Corporate updates included Domino’s naming Andrew Andrea as CFO amid subdued demand, Ben & Jerry’s co-founder Jerry Greenfield resigning over a rift with Unilever, and Pets At Home’s CEO exiting after another profit warning, driving shares to 2020 lows. Meanwhile, fiscal pressures remain, with a £20bn shortfall, rising gilt yields, and speculation of tax rises and spending cuts ahead of November’s review.

Top Market Movers: Among top gainers on FTSE 100 index, 3i Group PLC (LSE: III) witnessed a rise of 2.27% followed by Rolls-Royce Holdings PLC (LSE: RR.) which gained around 1.75%.

Commodity Update: The U.S. dollar steadied Thursday after hitting a 3-1/2-year low before rebounding, as traders assessed the Fed’s cautious stance on further rate cuts. Gold slipped 0.48% to $3,700, silver fell 0.32% to $42.01, and copper edged down 0.01% to $9,995.35. Brent crude dropped 0.50% to $67.62 after a recent rally, with prices supported earlier by Fed cuts, mixed U.S. inventory data, and supply concerns from Russia-Ukraine tensions.

Our Stance: The Federal Reserve’s decision to cut rates, compelled by rising unemployment risk and labor market weakness, reflects a delicate balancing act: leaning toward stimulus while trying not to ignite inflation or undermine financial stability. Chair Powell’s move—modest compared to the steep cuts demanded by President Trump—signals caution, particularly given distortions in the housing market and labor supply issues. Meanwhile, markets appear eager but restrained: equities are near highs, gold pulled back, and emerging markets paused, as investors digest that this is likely a risk-management cut rather than a full easing cycle. Oil prices eased amid this caution, while the U.S. dollar strengthened as hopes for dovish policy softened slightly.

FTSE 100

The FTSE 100 gained 0.22% to close at 9,228.75, maintaining strength above key support at 8,900 and the 50-day SMA at 9,139.61. However, it remains just below the 21-day SMA at 9,235.25, with upside momentum appearing limited, indicating scope for consolidation. The RSI at 53.41 reflects a neutral to mildly positive tone. Immediate support is at 8,950, while resistance levels are seen at 9,500 and 9,800.

Source - EODHD/Others