Rate cuts doubts weigh on the UK market

The prevailing optimism about the trajectory of US key rates is losing steam pretty fast, weighing on stock market indices rich in growth stocks. Higher oil prices and robust UK PMI data lifted the FTSE 100, which ended yesterday's session up 0.5%.

The final S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) rose to 53.4 in December, up from 50.9 in November, highlighting the resilience of the British service industry.

However, the FTSE 100 was down 0.8% this morning, ahead of the important U.S. jobs data report due later today, which might give investors some clues on the future path of interest rates globally.

After December’s euphoria on rate cuts, Money markets are now betting on 130 bps of rate cuts by the Bank of England this year, down from 150 bps last week.

Miners are among the worst performers today, with the Metal & Mining sector down 1.4%.

Things to read today:

• Hedge funds for the general public really suck (Wall Street Journal).
• How October 7 changed America's culture of free speech (The Atlantic).
• Is the west talking itself into decline? (FT)