London markets began the week in sluggish fashion as the prospect of U.S. rate cuts eased following Friday’s jobs boost.
The FTSE 100
remained flat as rebounding mining giants helped the blue-chip index avoid major losses.
Miners recovered from a three-day losing streak after China’s major steel companies launched an investigation into the recent record surge in iron ore prices.
What’s moving the market?
Strong U.S. jobs data on Friday continued to weigh down global markets as Asian stocks fell considerably overnight.
The U.S. employment boost has cast doubts over future Federal Reserve rate cuts.
While a cut is still anticipated in July it is now less clear whether one will follow in September.
London markets fared better than most as mining and tobacco stocks rose but the Fed’s conundrum held back any potential gains.
Speaking to MarketWatch, CME Group senior economist Erik Norland said the market has “reined in how aggressively the Fed is expected to cut rates” following Friday’s data.
He said: “The market basically thinks that there is no chance of them leaving rates on hold.
“As such, if the Fed refuses to cut rates, it will come as a major shock to markets.”
The minutes of the Fed’s most recent meeting will be released on Wednesday and should give more of an indication into the central bank’s thinking.
Trade talks between the U.S. and China are set to resume this week but last week’s optimism over the trade truce has been replaced by caution.
Which stocks are active?
U.K. tobacco company Imperial Brands
rose 2.6% after launching a £200m share buyback program and plans to revise its dividend policy to allow payouts to grow in line with performance.
British Airways owner International Consolidated Airlines
fell 1.5% after the U.K. Information Commissioner’s Office fined the airline £183m following a data breach last year.