Markets Today: UK Retail Sales Beat Estimates, Trump Signs Japan Deal, FTSE 100 Bounces Off 100-Day MA. NFP Next

[Ben Graham]

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On Friday morning, the positive feeling from a strong day on Wall Street carried over to Asian stock markets. This happened because new information continues to show that the U.S. job market is slowing down, which makes investors more confident that the U.S. central bank will cut interest rates this month.

As a result, Asian stocks rose by 0.7%, and stock markets in mainland China also bounced back after they had dropped on Thursday.

Japan's Nikkei .N225 rose 0.9% and Taiwan's stock benchmark .TWII climbed 1.1%. Both those markets are close to recent record highs.

Hong Kong's Hang Seng .HSI added 0.8%, while mainland Chinese blue chips .CSI300 advanced 1%. Australian stocks .AXJO gained 0.5%.

For more on the Hang Seng, read Hang Seng Index Technical: Recent sell-off overdone, bullish trend remains intact

In Japan's bond market, the return on 30-year government bonds fell for a second day on Friday, moving further away from the record high it had reached on Wednesday of 3.255%.

In other news, U.S. President Trump signed an order to make a trade agreement with Japan official. Under the deal, the United States will apply a tax of up to 15% on most goods it imports from Japan. In return, Japan has promised to set up a $550 billion fund to invest in the U.S. The two countries had agreed to this deal back in July but were still finalizing the details until now.

UK Retail Sales Beat Estimates, June Figure Revised Lower

In July, retail sales in the UK grew by a strong 0.6%, which was better than experts had predicted. This increase was driven by a boost in online shopping and clothing sales, helped by good weather and extra spending related to the Women's EURO 2025 soccer tournament.

However, the good news was dampened by a major correction to the sales figures for June, which turned out to be much weaker than first reported. Compared to the same time last year, July sales were up 1.1%. Despite the solid performance in July, the bigger picture suggests a slowdown, as sales over the last three months actually fell, ending a year-long period of growth.

Source: TradingEconomics

European Open - European Stocks Edge Higher

European stocks are up slightly this morning as investors cautiously wait for the important U.S. jobs report to be released later today.

Overall, the market is on track to finish a very up-and-down week with a small gain. Technology stocks are the best performers today, boosted by the Swedish company Hexagon, whose shares jumped nearly 7% after it announced a multi-billion dollar deal to sell a part of its business to a U.S. firm.

On the downside, the Danish wind farm company Orsted saw its stock fall 1.3% after it lowered its profit forecast because of a lack of wind. Additionally, shares in the banking software company Temenos dropped sharply after it announced its CEO was leaving immediately.

On the FX front, the U.S. dollar weakened slightly against other major currencies on Friday morning.

The Japanese yen gained strength after Japan finalized a trade deal with the United States that will lower U.S. taxes on imported Japanese cars. USD/JPY trading at 148.21. The New Zealand dollar also climbed, benefiting from a positive day in Asian stock markets.

In other movements, the euro was up 0.1% to 1.1666 to the US Dollar with the British pound, and Australian dollar also seeing small increases against the U.S. dollar. Despite today's dip, the dollar's overall value is still on track to finish the week higher than it started.

Currency Power Balance

Source: OANDA Labs

Oil prices are falling for the third day in a row on Friday and are now on track to record their first weekly loss in three weeks.

The price decline is being caused by two main factors: growing expectations that major producers will soon increase the supply of oil, and worries about weaker demand for fuel. These demand concerns were heightened by a surprise report showing that the amount of stored crude oil in the U.S. has increased.

Currently, the price for Brent crude, the global standard, is around $66.80 a barrel, while the main U.S. oil price is about $63.25 a barrel.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, the European session has already seen a glut of data releases this morning with UK retail sales and German industrial production. The rest of the session brings Euro Area GDP data (revised) numbers before attention shifts to the US session.

All eyes today are on the U.S. jobs report for August, which is due to be released at 12:30 GMT time. This report is seen as particularly crucial because other data earlier this week has already pointed to a weakening U.S. job market.

Investors are watching closely, as many are already expecting the U.S. central bank, the Federal Reserve, to cut interest rates by 0.25% at its meeting later this month. A weak jobs number today would likely confirm those expectations.

For more on the NFP release, read NFP Preview: US Jobs Report & Implications for the DXY, Gold (XAU/USD) & Dow Jones (DJIA)

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE 100 Index

From a technical standpoint, the FTSE 100 has had an interesting week. After completing the Head and Shoulder breakout and reaching the sell target, the index bottomed out on September 2.

We did have a potential double bottom print on September 3 before a rally higher materialized breaking the descending trendline in play from the recent all-time high.

The next moves for the FTSE will be crucial. Today's UK retail sales data may bode well for the index but overall sentiment may shift after today's US Jobs data.

This could have a knock on impact on global markets and weigh on equities in the UK and Europe as well.

Immediate resistance rests at 9271 before the swing high at 9308 comes into focus.

On the downside the FTSE found support this morning at the 100-day MA before bouncing higher. Below that support is provided by 9180 handle and then the 200-day MA at 9165.

FTSE 100 Four-Hour Chart, September 5. 2025

Source: TradingView.com (click to enlarge)

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