1) 📊 Last Week in Review (Week ending 06 Feb 2026)
Performance snapshot:
- FTSE 100: 10,369.75 | +1.43% (YTD +2.48%)
- S&P 500: 6,932.30 | -0.10% (YTD +1.27%)
- MSCI World: 4,528.99 | +0.03% (YTD +0.87%)
- UK 10y gilt yield: 4.51% (+0 bp) | US 10y: 4.22% (+1 bp)
- GBP/USD: 1.3614 (+0.68%) | Brent: $68.05 (+0.74%)
What moved markets:
- The “Dow 50k” Milestone: While the S&P and Nasdaq struggled with tech volatility, the Dow Jones Industrial Average hit an all-time high above 50,000, fueled by a rotation into financials and industrials.
- BoE Dovish Hold: The Bank of England kept rates at 3.75%, but a closer-than-expected vote split (4-5) signaled that a cut to 3.50% could come as early as March, boosting the FTSE 100.
- Geopolitical Jitters: US–Iran tensions in the Middle East provided a late-week floor for energy prices, helping oil majors like Shell and BP lift the UK index despite domestic political noise.
Sector & style:
- Best/Worst sector: Financials +1.9% / Technology -2.2%
- Growth vs Value: Value outperformed Growth by 1.6%
- Large vs Small: Large Cap outperformed Small Cap by 0.7%
So what?
The “Magnificent 7” era is facing valuation fatigue. For UK investors, this “rotation” is a tailwind, as the FTSE’s banking and energy-heavy composition is finally attracting global capital fleeing expensive US tech.
2) 🌟 The Defining Narrative
Can the “Missing” US Jobs Data Justify a Spring Rate Cut?
Why it matters:
The partial US government shutdown has left markets flying blind without official January employment data. This week’s rescheduled release will settle the debate: is the US economy cooling enough for the Fed to cut rates in March, or is the labor market still too “hot”?
- Confirms: A jobs print below 160k and CPI below 2.9% confirms the pivot narrative.
- Breaks: A “hot” inflation print or a surprise jobs surge will push yields back toward 4.5% and punish tech valuations.
UK investor angle:
If US data is weak, the Dollar likely softens, pushing GBP/USD toward 1.38. While good for holiday money, this acts as a “drag” on the returns of US-denominated ETFs for unhedged UK investors.
3) 🏦 Central Bank Watch
Bank of England (BoE)
- What’s scheduled: Huw Pill (Chief Economist) Speech – Friday 12:00 PM UK.
- Market pricing: 68% chance of a cut in March following last week’s dovish hold.
- Key thing to listen for: Any softening on “services inflation” persistence.
- UK implications: Lower yields support FTSE 250 (mid-cap) companies sensitive to domestic borrowing costs.
Federal Reserve (Fed)
- What’s scheduled: Rescheduled Non-Farm Payrolls – Wednesday 1:30 PM UK.
- Market pricing: Current odds favor a hold in March, but a weak jobs report flips this to a 60% chance of a cut.
- Key thing to listen for: Average Hourly Earnings growth (the “inflationary” part of wages).
- UK implications: Fed signals drive the “risk-on/off” sentiment for the global portion of UK portfolios.
4) 🌍 Macro Calendar
| Day (UK) | Region | Event | Consensus vs Prior | Why it matters | Most sensitive asset |
| Tue 09:30 | UK | BRC Retail Sales | 1.4% vs 1.2% | Shows if the UK consumer is spending | Retail stocks / GBP |
| Tue 13:30 | US | Retail Sales (Jan) | -0.1% vs 0.4% | Tracks US consumer “exhaustion” | S&P 500 |
| Wed 13:30 | US | Jobs Report (Jan) | 165k vs 216k | The “delayed” reality check | US Treasuries |
| Thu 07:00 | UK | GDP (Q4 Prelim) | 0.1% vs 0.2% | Confirms if the UK avoided recession | FTSE 250 |
| Fri 13:30 | US | CPI Inflation (Jan) | 2.9% vs 3.1% | The week’s most important number | Gold / Nasdaq |
5) 📊 Earnings Watch
- BP (BP.) — Tuesday:
- What matters: Cash flow and buyback commitment at $68 oil.
- The “tell”: A dividend increase signals confidence in the “value rotation.”
- AstraZeneca (AZN) — Thursday:
- What matters: Growth in oncology and China market recovery.
- Read-across: The health of the “defensive” growth sector in the UK.
- Walt Disney (DIS) — Monday:
- What matters: Streaming profitability (Disney+) vs. Parks revenue.
- The “tell”: Guidance on consumer spending for the rest of 2026.
- Airbnb (ABNB) — Tuesday:
- What matters: 2026 booking lead times.
- Read-across: A proxy for global discretionary “middle-class” spending.
6) 💷 Fixed Income & Currency Outlook
A) UK Gilts / Rates
- Facts: 10y yield at 4.51%; 2y yield at 3.62%.
- Watchlist: Thursday GDP; a “zero” growth print may see yields fall.
- Portfolio angle: Stay with short-to-medium duration to capture yield while avoiding long-term inflation risk.
B) FX (GBP focus)
- Facts: GBP/USD 1.3614
- View: Range-bound. Sterling is remarkablAll eyes on the delayed US jobs and inflation prints — they’ll drive yields, sterling, and risk appetite.
Here’s what to watch, what could move markets, and what it means for a UK-based global portfolio this week.y stable compared to 2025. - Watchlist: US CPI (Friday). High US inflation = weaker GBP.
- Portfolio angle: For global portfolios, consider that a move toward 1.40 USD would lower the “paper value” of US holdings for UK-based investors.
7) 🧠 Sentiment Check
- Current mood: Neutral/Skeptical
- Market gauges:
- VIX: 17.7 (Suggesting investors are buying “insurance” for this week).
- CNN FEAR & GREED: 45 (Neutral) – Greed has evaporated after a flat January.
- Implication: Because expectations are low, a better inflation report could trigger a massive relief rally.
8) 📈 Valuations & Expectations
- Valuation snapshot:
- S&P 500 fwd P/E: 21.5x (Priced for a “perfect” landing).
- FTSE 100 fwd P/E: 13.4x (Remains historically cheap vs the US).
- So what? The UK provides a “valuation cushion.” If global growth slows, the FTSE’s low multiple provides more protection than the high-flying US indices.
9) 🗳️ Geopolitics & Wildcards
- Event: Ongoing Middle East tensions and shipping disruptions.
- Impact channel: Oil and key shipping routes.
- What to watch: Headlines on escalation/de‑escalation or shipping attacks that could tighten supply.
- Most sensitive assets: Brent, tanker/shipping equities, EM FX and European cyclicals.
- Event: China policy tweaks in response to weak inflation and growth.
10) ⚡ The Bottom Line
- If US CPI comes in cool or in line, then yields should drift lower and risk assets can extend gains, watch S&P 500 around the 6,900–7,000 area and UK 10y near 4.4–4.5%.
- If UK GDP and wage data disappoint (weaker growth, sticky pay), then gilts may rally but GBP could soften, watch GBP crosses and domestic UK cyclicals vs FTSE 100 multinationals.
- If credit or geopolitical headlines trigger a risk‑off spike in VIX above mid‑20s, then high‑beta equities and EM FX likely underperform, watch high yield spreads vs the ~300 bp area and EM currency baskets
© Clearly Investments Ltd. Educational information only. This is not investment advice.
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