FTSE 100 Pauses as Rate Caution Meets Commodity Weakness

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, was trading rose around 0.20% on 06 February 2026.

Macro Update: In February 2026, the Bank of England narrowly held interest rates at 3.75%. While inflation sits at 3.4%, it is expected to hit the 2% target by spring. However, growth remains subdued, with GDP forecasts downgraded to 0.9% and unemployment rising toward 5.3%.

Top Market Movers: Among top gainers on FTSE 100 index, Fresnillo PLC (LSE: FRES) witnessed a rise of 2.36% followed by Airtel Africa PLC (LSE: AAF) which gained around 2.06%.

Commodity Update: The U.S. dollar hovered near a two-week high on Friday, on track for its strongest weekly gain since November as equity markets retreated amid concerns over AI-related spending. The Japanese yen firmed ahead of Sunday’s national election. Commodities weakened, with gold down 1.10% to USD 4,836.20, silver sliding 6.72% to USD 71.56, and copper easing 0.79% to USD 12,830.00. Brent crude fell 0.74% to USD 67.05 as Middle East supply fears eased and attention turned to U.S.–Iran nuclear talks in Oman.   

Our Stance: In February 2026, the Bank of England adopted a "cautious but ready" stance, holding interest rates at 3.75% in a narrow 5–4 vote. Policymakers expect inflation to reach the 2% target by spring, signaling further cuts are likely as they balance persistent service costs against a softening labor market.

FTSE 100: The FTSE 100 slipped 32.94 points to trade near 10,276.78, yet continues to hold well above the key 9,800 support zone, maintaining a stable broader structure. The 21-day and 50-day Simple Moving Averages remain below current levels, offering underlying support and scope for near-term consolidation. Momentum has eased slightly, with the RSI at 60.12, indicating some loss of pace. Immediate support is placed near 8,950, while resistance is seen around 10,400 and 10,600.

Source: Charts by EODHD/Others