Global Economic Uncertainty: Starmer’s Rise, Britain’s Cooling Job Market, and U.S.-China Market Pressures:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.36% on 10 March 2025.  

Macro Update:  Support for Prime Minister Keir Starmer has risen as he strengthens his diplomatic presence, engaging in high-profile meetings with U.S. President Donald Trump and European leaders to address the Ukraine war and protect Britain from potential U.S. tariffs. His growing role as a mediator has contributed to increased public approval. Meanwhile, Britain's job market showed signs of slowing in February, with hiring cooling and starting salary growth dropping to its lowest level since 2021, highlighting employer concerns over rising labor costs and economic uncertainty. In financial markets, a group of executives and financiers is advancing a proposal to revitalize the London Stock Exchange’s struggling Alternative Investment Market (AIM), aiming to rebrand and relaunch it as the Global Growth Exchange to attract new investors. Additionally, the government has announced plans to streamline public reviews that delay housing developments, targeting the construction of 1.5 million homes over the next five years. 

Top Market Movers: Among top gainers on FTSE 100 index, Land Securities Group PLC (LSE: LAND) witnessed a rise of 3.19% followed by Severn Trent PLC (LSE: SVT) which gained around 2.97%. 

Commodity Update: The dollar started Monday weak after significant losses last week, driven by concerns over a potentially weakening U.S. labour market and global trade tensions. U.S. President Trump's tariffs on top trading partners, though delayed for a month, added to fears of a slowing U.S. economy. Investors turned to safe-haven assets like the yen and Swiss franc. In commodities, gold rose 0.18% to $2,919.50, silver increased 0.26% to $32.89, and copper dipped 0.07% to $9,577.80. Brent crude dropped 0.40% to $70.10 due to weak inflation data from China and uncertainties surrounding U.S. trade tariffs. 

Our Stance: Recent developments indicate mounting concerns over global economic stability. In China, the Consumer Price Index (CPI) fell by 0.7% year-on-year in February, marking the first contraction since January 2024, while producer price deflation persisted. In the United States, investors are bracing for critical inflation data, with the Consumer Price Index for February scheduled for release on March 12, 2025. This report could further unsettle an already volatile stock market, which recently experienced its worst week in six months, amid fears of economic slowdown and escalating trade tensions. Additionally, the Federal Reserve's Beige Book report highlighted modest economic growth alongside rising uncertainty, particularly concerning President Trump's tariff policies, which are contributing to inflationary pressures and subdued business investment. Collectively, these factors underscore the fragility of the global economic landscape, with deflationary trends in China and inflationary concerns in the U.S. heightening investor anxiety. 

FTSE 100 

The FTSE 100 was trading at 8,631.11 on Monday, marking a 0.46% loss and forming a bearish candlestick pattern. Despite this, the index maintains a positive market sentiment, with the price staying above the 50-period Simple Moving Average (SMA), which acts as a strong support level. This suggests the potential for continued upward momentum in the medium term. However, the index is trading below the 21-period SMA, indicating a more favourable short-term outlook, potentially signalling further weakness in the near term. The Relative Strength Index (RSI) is at 45.63, showing mild bearish momentum, which suggests there is still room for further losses before a possible rebound. These technical signals highlight the need for caution, but they also present an opportunity for short-term investors looking for a potential pullback or trade near support levels. Traders should monitor closely for any shifts in momentum or reversal patterns. 

Data Source - EODHD/Others