UK equities moved higher on Friday after weaker-than-expected U.S. labour market data reinforced expectations that the Federal Reserve could take a less aggressive approach to interest rates. With U.S. markets closed for the Independence Day holiday, lighter trading volumes were also expected to increase volatility during the European afternoon.
The FTSE 100 gained 0.29% by 03:23 ET (07:23 GMT). Germany’s DAX rose 0.75%, while France’s CAC 40 added 0.30%. Sterling strengthened 0.16% against the U.S. dollar to $1.3367. U.S. exchanges remained closed for the holiday, leaving European markets with reduced liquidity.
The U.S. economy created 57,000 nonfarm payroll jobs in June, well below economists’ expectations of 113,000. Employment figures for April and May were also revised lower, reinforcing signs of a cooling labour market.
Although the unemployment rate edged down to 4.2%, the decline was largely attributed to lower labour force participation rather than stronger hiring. Meanwhile, wage growth matched market forecasts.
Negotiations between the United States and Iran have been temporarily suspended ahead of the state funeral of former Supreme Leader Ayatollah Ali Khamenei, whose body arrived at Tehran’s Grand Mosalla complex early on Friday.
Official ceremonies are due to run from 4 July through 9 July, with Iranian officials expecting between 15 million and 20 million mourners to attend.
Mediators from Qatar and Pakistan said discussions would resume “at the earliest possible time” once the commemorations have concluded. Iran’s Revolutionary Guard leadership also warned the U.S. and Israel against carrying out military action during the funeral procession, while Washington confirmed that a second Marine unit of more than 2,000 personnel has been deployed to the region.
Shipping activity through the Strait of Hormuz continued to recover, reaching at least 258 vessel movements last week compared with 138 the previous week. However, traffic remains well below pre-conflict levels of around 130 ships per day.
Prime minister-in-waiting Andy Burnham told LBC’s Andrew Marr that he would increase business rates on large out-of-town warehouses to help finance a 20% reduction in business rates for high street retailers.
“I believe there is a case for higher business rates on warehouses,” he said, adding that he remained committed to Labour’s 2024 manifesto pledges on income tax, VAT and national insurance. Burnham also declined to identify his preferred chancellor before his expected confirmation on 20 July.
In commodity markets, Brent crude rose 0.32% to $72.03 per barrel, while WTI crude gained 0.10% to $68.76. Gold prices climbed sharply as the weaker dollar boosted demand, with gold futures rising 1.39% to $4,183.65 an ounce and spot gold advancing 1.13% to $4,170.36.
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