Markets Stay Cautious Amid Mixed Data and Rate Cut Expectations

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went down around 0.15% on 05 June 2025.  

Macro Update: UK business sentiment appears to be improving as fewer companies cite U.S. trade policy as a major concern, aided by Britain’s partial exemption from new U.S. tariffs. Meanwhile, the ONS admitted to a minor inflation data error due to incorrect car tax input. The government’s push to revitalize the economy includes a new £50 billion pension fund investment pledge focused on UK infrastructure and innovation. Car sales saw modest growth in May amid EV price wars, while equities closed higher on healthcare and mining gains. Corporate highlights included Fevertree's shared tariff strategy with Molson Coors, and Dr. Martens’ upbeat outlook under new leadership. 

Top Market Movers: Among top gainers on FTSE 100 index, Fresnillo PLC (LSE: FRES) witnessed a rise of 4.20% followed by Anglo American PLC (LSE: AAL) which gained around 3.52%. 

Commodity Update: The dollar hovered near six-week lows on Thursday after weak U.S. data fueled fears of slow growth and persistent inflation. The euro remained steady ahead of an expected ECB rate cut. Gold dipped 0.10% to $3,395.95. Silver rose 0.11% to $34.74 per ounce, and copper gained 0.17% to $9,649 per metric ton. Brent crude slipped 0.30% to $64.65 amid rising U.S. fuel stocks and Saudi price cuts for Asia. 

Our Stance: Global markets reflected a cautious tone as weak U.S. data signaled mounting economic pressure from President Trump’s trade policies, with the services sector contracting for the first time in nearly a year and private payroll growth falling well short of expectations. This reinforced concerns of slowing growth and sticky inflation, leading to a Treasury rally and speculation of further Fed rate cuts. Meanwhile, European equities stayed firm ahead of an anticipated ECB rate cut, supported by stronger-than-expected German industrial orders and a recently approved corporate tax relief package, while the euro held steady near recent highs amid diverging rate expectations. 

FTSE 100: The FTSE 100 edged up 0.12% on Thursday to 8,812.04, driven by improved investor sentiment and positive tech-led momentum. The index continues to trade above its 50-period Simple Moving Average, signaling sustained strength in the broader trend. A stable 14-period RSI at 65.86 and a recent bullish candlestick pattern highlight growing upside pressure. Gains were further supported by optimism around the UK’s tech and services sector recovery, as shown by a rebound in the latest PMI data. While the outlook remains positive, traders should watch for potential consolidation or early weakness that could signal a temporary pause in the rally.​ 

FTSE 100 Technical Chart, Source - EODHD/Others