The FTSE 100 edged down 0.2% to 8,570.77 on Tuesday, underperforming European peers as simmering global trade tensions overshadowed a weaker dollar. The mid-cap FTSE 250 dipped 0.3%, while the AIM All-Share eked out marginal gains. Sterling climbed to $1.2481, capitalising on dollar softness after US job openings slumped more than expected, stoking bets of an earlier Federal Reserve rate cut.
Tariff Turbulence Dominates Sentiment
Investors grappled with whiplash from Washington’s trade manoeuvres. Hours before tariffs on Mexican and Canadian goods were set to take effect, President Trump delayed the levies by a month following calls with leaders Claudia Sheinbaum and Justin Trudeau. However, a fresh 10% tariff on China remains on course, prompting Beijing to retaliate with import duties and an antitrust probe into Google. The dollar slid against European currencies but held steady versus the yen.
The US JOLTS report intensified rate-cut speculation, showing job openings plummeted to 7.6 million in December—well below forecasts. Pantheon Macroeconomics’ Sam Tombs warned the data signals “monetary policy remains tight enough… to stifle businesses’ expansion plans,” reinforcing expectations of a subdued January nonfarm payrolls print due Friday.
Entain Soars on BetMGM Break-Even Target
Entain surged 6.2% after forecasting its US BetMGM joint venture with MGM Resorts would hit break-even this year, buoyed by accelerated revenue growth. The sports betting arm reported 2024 net revenue of 2.1billion(+7.12.1billion(+7.12.4-2.5 billion.
Vodafone, Diageo Drag
Vodafone tumbled 7.8% as German woes deepened. A law change ending bulk TV contracts in multi-dwelling units hammered German service revenue, which sank 6.4% in Q3—offsetting a UK rebound. Diageo fell 1.6% after scrapping medium-term sales guidance, citing weak Latin American demand and tariff risks. CEO Debra Crew warned US levies on Mexico and Canada could dent tequila and whisky sales, though CFO Nik Jhangiani signalled plans to mitigate 40% of a potential $200 million profit hit through inventory adjustments.
Commodities, Data Ahead
Brent crude edged up to 76.19, while gold jumped to 2,840.78/oz as haven demand flickered. Wednesday’s spotlight falls on GSK’s full-year results and eurozone PMIs, with markets braced for further clues on the global growth trajectory.
Key Wednesday Watchlist
- Corporate: GSK (FY results), SSE (trading statement)
- Economic: UK/EU composite PMIs, US ADP payrolls, eurozone PPI
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