Where we are: The FTSE 100 is trading at 10397, down 0.39% on the day, struggling to find footing as European bourses broadly decline. Overnight action saw Asian markets firmly in the red, with the Nikkei down 3.55%, and this sentiment has carried through into European trading, with the DAX and CAC 40 both off by over 0.6%. The current level is well below yesterday’s NY close, suggesting a weak open for US equities is likely to weigh further.
What’s driving it: The Bank of England’s policy statement on systemic stablecoins yesterday provides a domestic backdrop, though its immediate market impact is muted. More pressing is the upcoming Flash Manufacturing and Services PMI data at 09:30 BST, which will offer a crucial gauge of UK economic momentum. This domestic data will be key in determining how the FTSE reacts to the significant global risk-off sentiment evident in the S&P 500 futures, which are down a sharp 1.48%, and the VIX surge to 19.93.
- Bank of England policy statement on stablecoins released yesterday.
- Upcoming Flash Manufacturing and Services PMI at 09:30 BST.
- Global tech sell-off and rising VIX are creating broad market headwinds.
NY session focus: The 09:30 BST UK PMI releases are the immediate domestic catalyst to watch, with forecasts suggesting a slight dip in manufacturing but a rebound in services. Traders will be looking for any significant deviation from these prints to guide intraday direction. The broader risk sentiment, driven by US tech weakness and a firmer DXY (101.28), will continue to be a significant cross-asset driver. The pain trade here is a breakdown below the 10350 support level, which would open up a deeper decline towards the 10200 psychological mark.