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The FTSE 100  experienced a slight dip of 0.069%, closing at $8,274, as global markets reacted to robust U.S. employment figures and escalating geopolitical risks.

The latest U.S. Non-Farm Payrolls report revealed a gain of 254,000 jobs in September, well above the forecast of 140,000. This stronger-than-expected data reduced the likelihood of aggressive Federal Reserve rate cuts in the near term, though a 25-basis-point reduction is still expected for spring 2024.

BREAKING : US NON-FARM PAYROLLS

Non-farm payrolls in the United States increased by 254 thousand in September of 2024. pic.twitter.com/zjJbPXX2Ii

— Jayanth Ukwaththa (@JUkwaththa) October 4, 2024

Despite solid job growth, ongoing geopolitical tensions in the Middle East, particularly between Israel and Hamas, have kept investor sentiment cautious. Any disruptions in the oil-producing region could drive inflation higher, impacting global markets, including the FTSE 100.

While these risks remain uncertain, they continue to weigh on market outlooks.

Global Bond and Commodity Market Developments Impacting Sentiment

Alongside geopolitical concerns, global bond and commodity markets are also influencing investor behavior. India and South Korea are making strides toward joining a major global bond index, potentially attracting significant foreign capital inflows. However, South Korea’s inclusion may be delayed until 2025 due to insufficient trading volume.

South Korea, India, Vietnam Eye FTSE Russell Bond Index Inclusions

South Korea meets conditions to join the FTSE World Government Bond Index (WGBI), but thin Euroclear bond transactions may delay entry until 2025. Meanwhile, India could enter FTSE's emerging-market bond index,… pic.twitter.com/KLgRkLZu0p

— CRUXX | News App (@CRUXX_Ind) October 7, 2024

Meanwhile, in the commodities sector, Rio Tinto is in discussions to acquire lithium producer Arcadium Lithium. The move comes as lithium prices have declined due to oversupply in China. If successful, the acquisition would position Rio Tinto as a leader in the electric vehicle and clean energy markets.

 

With nonfarm payrolls rising by 254,000 in September, versus the forecasted 140,000, the latest US jobs data significantly surpassed expectations.

This robust employment growth has tempered expectations for further aggressive rate cuts by the Federal Reserve, though 25 basis point reductions are still anticipated for spring 2024.

Strong job growth decreases the requirement for extreme interest rate cuts.

Technical Outlook: FTSE 100 – Daily Chart Analysis

The FTSE 100 trades at $8,317, reflecting a minor recovery from recent lows. On the 4-hour chart, the index is encountering immediate resistance at $8,347.

If the index can break above this level, the next resistance points will be $8,373 and $8,420.

Conversely, support is set at $8,283, followed by $8,238 and $8,198. These levels indicate a range-bound movement in the short term, with traders eyeing potential breakouts above resistance or drops below support to gauge future market direction.

Technical Indicators Review

The Relative Strength Index (RSI) is currently at 54.91, signalling neutral market momentum. This suggests the FTSE 100 is neither overbought nor oversold, implying a lack of strong directional bias.

Meanwhile, the 50-day Exponential Moving Average (EMA) is at $8,282, acting as a key short-term support level.

Should the index sustain trading above this EMA, it could indicate continued bullish sentiment, whereas a break below it may suggest increased selling pressure.