The FTSE 100 is expected to open around 30 points, or 0.3%, higher at 10,492.55 on Monday, extending Friday’s modest recovery. London’s blue-chip index ended Friday 33.68 points, or 0.3%, higher at 10,461.95, although it still recorded its steepest weekly decline since April.
Asian markets were mostly firmer, with Japan’s Nikkei 225 up around 2% and Australia’s S&P/ASX 200 gaining 0.1%, while Hong Kong’s Hang Seng was broadly flat. Mainland Chinese markets remained closed for a holiday.
Despite the softer US jobs report, government borrowing costs remain elevated.
The US 10-year Treasury yield was holding around 5.26%, while the 30-year yield remained close to 5.62%, leaving equity markets vulnerable to any renewed bond-market selling.
Currency markets also remained volatile. Sterling weakened to around $1.3207, while strengthening against the euro to approximately €1.1800. The euro fell to around $1.1188, having touched its weakest level since May 2025 earlier in the session.
Concern over France’s public debt and political uncertainty has increasingly begun to weigh on the single currency, with the spread between French and German government borrowing costs widening sharply. Reuters reported the euro falling to a 17-month low on Monday as those fiscal concerns intensified.
Energy prices remain another significant market risk. Brent crude increased to around $101.45 a barrel from $100.50 late on Friday, keeping oil firmly above the psychologically important $100 level.
Tensions around the Strait of Hormuz remain unresolved. Iran has said reopening the strategically important shipping route remains conditional on its demands being met, while Iranian Foreign Minister Abbas Araghchi said on Sunday that there was no military solution to the conflict and called for negotiations.
Shipping risks also remain elevated after another tanker was struck by an unknown projectile in the waters around the Strait, one of several recent incidents affecting vessels in the region.
Gold eased to around $4,138 an ounce, from $4,143 late on Friday.
For UK investors, Monday’s economic calendar includes the UK services and composite PMI readings, followed later by the US ISM services index. There could also be significant corporate news from the telecoms sector.
BT Group is reportedly close to an agreement to acquire TalkTalk, with the Financial Times reporting that a deal had been agreed in principle with shareholders and could be announced as early as Monday. No transaction had been formally announced at the time of the report.
For investors, the early FTSE recovery reflects a more favourable interest-rate backdrop following the weak US jobs figures, but the wider market remains finely balanced.
The immediate tension is between lower expectations for Fed tightening on one side and still-elevated Treasury yields, oil above $100 and European fiscal concerns on the other.
If bond yields continue to stabilise, rate-sensitive UK shares could extend Friday’s recovery. Another surge in yields or energy prices would quickly put that rebound under pressure.
