The FTSE 100 index closed 0.6% higher, marking a positive end to the trading day. This uplift was largely attributed to fresh research indicating a significant rise in consumer confidence, reaching its highest level in nearly two years. The GfK consumer confidence index increased by three points in August, reaching minus 14, a score not seen since August 2024, shortly after the Labour party secured a general election victory.
Miners played a crucial role in London's blue-chip index gains, benefiting from a rally in gold prices. Antofogasta and Endeavor both saw substantial jumps, ranging between 4% and 5%. Anglo American, currently undergoing a strategic overhaul to concentrate on copper, also climbed 2.8% as broader metals prices contributed to a flight to commodities.
In the United States, market focus remained on the repercussions of Treasury Secretary Scott Bessent's decision to double the buyback program for longer-dated US bonds. Bessent announced plans on Wednesday to increase short-term borrowing to purchase $4 billion worth of 30-year Treasuries, which is double the amount from the previous quarter. This move, intended to manage long-term borrowing costs, initially caused a 10 basis point drop in 30-year Treasury yields. However, these gains were erased on Thursday, with yields climbing by as much as eight basis points, even as Bessent hinted at further interventions.
Neil Wilson, an investor strategist at Saxo UK, commented that the buyback program "is not a fix for the key underlying reasons why yields have broken out higher." Gold prices have significantly increased since Bessent's announcement, reaching $4,543/oz, its highest level since early June, amid concerns that the bond market intervention could become more drastic. Concurrently, the dollar weakened, falling to its lowest level against major currencies since April.
