Where we are: The FTSE 100 is trading at 10417, up 0.52% on the day, building on overnight strength. It’s currently trading above its prior New York close and is pushing towards the upper end of its intraday range. We’re seeing broad-based gains across the index, with financials and commodities leading the charge.
What’s driving it: The primary driver today is the Bank of England’s policy statement and draft rules on regulating systemic stablecoins, published this morning. While the headline CPI prints remain steady at 2.8% YoY, the core reading ticked up to 2.6% YoY, offering a slight nudge to inflation expectations. This domestic policy development is overshadowing cross-border flows, though US yields are ticking higher, with the 10Y at 4.485% and the 2Y at 4.266%, which is a potential headwind if sustained.
- Bank of England’s stablecoin regulation announcement.
- UK CPI holding at 2.8% YoY, with core ticking up to 2.6% YoY.
- Broad strength in financials and commodity-linked names, mirroring yesterday’s intraday action.
NY session focus: With no major US data prints scheduled before the New York open, attention will remain on the BoE’s regulatory announcement and its implications for financial sector participants. We’ll be watching the 10450 level on the FTSE 100 for any signs of resistance, with the 10400 level acting as immediate support. The trade that’s working is long financials and miners, playing into the domestic narrative. The trade at risk is any significant shift in US yields that spills over into broader risk sentiment. The pain trade here is a sharp spike in US yields forcing a broader risk-off unwind of UK equity longs.