Markets Weekly Roundup: October 2nd
In London this week, Andy Burnham delivered a speech in Liverpool and got emotional over his father, Roy, who passed away. On that same day, Scotland's First Minister, John Swinney, stated that he will be the last Prime Minister of the UK.
Westminster's Autumn Shift: Sanctions, Scrutiny, and Structural Strains
While Parliament breaks for its autumn conference season, Westminster's machine isn't slowing down. From aggressive economic statecraft targeting the Kremlin's maritime shadow fleet to fierce domestic battles over central bank independence and public spending, the policy landscape this week reveals a government wrestling with hard macroeconomic and geopolitical realities. Key Political & Policy Developments
The Russia Sanctions Blitz: On October 1, the UK government rolled out a sweeping new package of 31 measures targeting Russia’s wartime infrastructure. Crucially, the crackdown goes after LNG shadow fleet vessels, financial war chests, and disinformation networks, signaling an escalation in economic warfare as drone activity surges on the eastern European front.
Treasury Committee vs. The Bank of England: Parliament's fiscal watchdogs have launched a high-stakes inquiry into whether the Bank of England's monetary independence remains fit for purpose 30 years on. Concurrently, MPs are warning politicians to stop using the Office for Budget Responsibility (OBR) as a political punching bag when public finances get tight.
Welfare Overhauls Under Fire: Heated debates continue over sweeping welfare reforms, particularly proposals regarding disability benefits for young people. Ministers are facing intense friction as the government attempts to curb soaring welfare expenditure without triggering massive spikes in poverty.
Public Sector Balance Sheet Black Holes: Parliamentary committees are turning the screws on unresolved legacy state liabilities—highlighting the ongoing drain of public funds into operations like British Steel, where hundreds of millions of taxpayer pounds are being burned without a clear path to financial sustainability.
London Markets Weekly Review: Gilt Rout and Bond Yield Spikes Drag Down FTSE 100
London equities suffered a bruising week, driven by a fierce sovereign bond sell-off that pushed borrowing costs higher and triggered the blue-chip index's steepest weekly retreat in months. Weekly Performance Breakdown
FTSE 100: The blue-chip index managed a modest 0.32% rebound on Friday to close at 10,461.95 points, but still finished the week down 2.2%—marking its steepest weekly drop since April.
FTSE 250: The midcap index followed a similar defensive trajectory, ending the week marginally lower at 24,194.24 points.
Key Drivers Behind the Move
The Gilt Market Rout: The primary weight on UK equities was a violent sell-off in government bonds, which saw the 30-year gilt yield break above 6% and mortgage rates hit three-year highs. The soaring yields rattled risk appetite, heavily pressuring rate-sensitive sectors like banks and housebuilders.
The Friday Rebound: Markets clawed back some ground on Friday following a softer-than-expected U.S. jobs report, which helped ease immediate global interest rate fears and offered a brief reprieve to battered rate-sensitive components.
Corporate Carnage in Financials: In individual stock news, IG Group shares plunged roughly 23% to 25% after the online trading platform issued a de facto profit warning and cut its 2026 revenue growth forecast due to sluggish market conditions. Sector peers Plus500 and CMC Markets were dragged down in sympathy, shedding 5.1% and 4% respectively.
Global Commodities, Equities, Currencies, and Crypto
Commodities: Brent crude oil ended the week up at $106 a barrel, which is not ideal for macroeconomics, especially with the diesel situation. WTI (West Texas Intermediate) is not correlating with Brent crude, the world's oil benchmark, and is trading at $93 a barrel to end the week.
Stock Markets:
The S&P 500 (the 500 biggest US companies) is little changed for the week.
The tech-heavy Nasdaq stock index is up for the week, making all-time highs again with its biggest company, NVIDIA, also making all-time highs. Nvidia makes up around 8% of the Nasdaq, known in futures as the NQ and in CFD trading platforms as the US TECH 100.
The French stock index, the CAC 40, suffered this week, weighed down by heavyweight LVMH (Louis Vuitton), which is down for the week by around 2.5%.
Germany's DAX stock index is also down for the week, but only around 1%.
In Asia, the Nikkei 225 stock index in Tokyo had a good week, while the Korean Kospi is little changed for the week.
Currencies: This week was a story of dollar strength, with the DXY up on the week. EUR/USD sold off, the Great British Pound (GBP) was little changed on the week, and the Japanese Yen (JPY/USD) continues its downtrend.
Crypto: Bitcoin is little changed on the week, while Ethereum and Ripple's XRP are both down for the week with low trading volume.