Rising Inflation and Tariff Pressures Weigh on Markets, Keeping Central Banks Cautious:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.28% on 16 July 2025.  

Macro Update: Britain's inflation rose to 3.6% in June, its highest in over a year, dampening expectations for Bank of England rate cuts and pushing bond yields higher. The surprise jump in CPI has shifted investor sentiment and may influence upcoming monetary decisions. Meanwhile, the FCA fined Barclays £42 million for significant anti-money laundering lapses tied to clients involved in a major laundering case. Separately, the Bank of England is expected to slow its bond sale programme to reduce market pressure and taxpayer losses from quantitative easing. Additionally, the UK government scrapped plans for a green investment taxonomy, citing inefficiency and a shift toward more effective sustainable finance measures. 

Top Market Movers: Among top gainers on FTSE 100 index, Intermediate Capital Group PLC (LSE: ICG) witnessed a rise of 3.39% followed by Hiscox PLC (LSE: HSX) which gained around 1.61%. 

Commodity Update: On Wednesday, the U.S. dollar and Treasury yields rose, pressuring the yen as U.S. inflation data showed the impact of the tariff. Gold dipped 0.01% to $3335.40, silver fell 0.12% to $38.06, and copper eased 0.01% to $9639.00. Brent crude, however, climbed 0.42% to $69.00, driven by expectations of stable demand in the U.S. and China amidst an improving economic outlook. 

Our Stance: Global market sentiment is showing signs of strain as U.S. President Donald Trump ramps up tariff actions, announcing a 19% duty on Indonesian goods with more levies expected, further stoking inflationary pressures. June’s CPI data reflected a 3.5% annual inflation rate, driven by rising costs in imported goods, prompting investor concerns that the Fed may delay rate cuts. Major U.S. banks reported strong Q2 earnings amid rebounding deal activity but flagged caution over tariffs' economic impact. Oil prices remained stable but fragile, while the dollar softened slightly and Nasdaq hit another record high, led by chip stocks after Nvidia’s China-focused announcement. 

FTSE 100 

The FTSE 100 is trading slightly higher at 8,955.06, maintaining strength above a key breakout zone that now acts as support. This continued move above former resistance highlights the resilience of the current uptrend, reinforced by the index’s position above both the 21-day and 50-day Simple Moving Averages. The RSI at 62.63 reflects firm buying interest, though a brief consolidation cannot be ruled out. Should any weakness occur, support near 8,600 may attract dip-buyers. With stable macroeconomic conditions and optimistic sentiment, the FTSE 100 remains well-placed to extend gains, provided external pressures remain limited. 

FTSE 100 Technical Chart, Source - EODHD/Others