Markets Today: UK Unemployment Hits 4-Year High, Gold Advances, FTSE 100 Eyes 200-Point Rally

Most Read: Why the end of the US shutdown sparks a huge rally in Stocks

The positive momentum in global stock markets, which had been boosted by the hopeful news of a deal to end the US government shutdown, fizzled out in Asian trading.

This change was caused by reports that China plans to restrict its exports of rare earth minerals to the US, which brought back worries about trade tensions.

The main index for Asia-Pacific stocks (MSCI) first went up but then reversed its direction, dropping by 0.3%, with Chinese markets falling the most. China's main stock benchmark dropped 0.9%.

Japan's Nikkei index also lost its early gains and fell 0.5%, mainly because shares of large semiconductor companies dropped heavily.

The overall mood got worse after The Wall Street Journal reported that China will speed up export approvals for most rare earth companies but block exports from any company connected to the US military.

This action raised fears of a new, intense fight over trade between the world's two biggest economies, even as the US continues to make progress toward ending its record-long government shutdown.

In the UK, regular pay (not including bonuses) increased by 4.6% in the three months leading up to September 2025 compared to the year before. The average regular weekly pay was GBP 684.

This rate of increase was slightly slower than the 4.7% rise seen in the previous three months and matched what analysts expected. In fact, this was the slowest growth in regular pay since early 2022.

This slowdown was mainly because private sector wages slowed down to 4.2% (from 4.4%), reaching their lowest point since late 2021.

However, public sector pay saw a sharp increase, accelerating to $6.6\%$ (up from $6.0\%$), which was the fastest rise since late 2023.

Looking at different job sectors, the biggest yearly pay jumps were in wholesale, retail, hotels, and restaurants (5.7%). Other gains were seen in services (4.7%), manufacturing (4.4%), construction (3.5%), and finance and business services (2.7%).When considering the effect of rising prices (inflation), the actual spending power of wages only grew by 0.5%, which is the slowest 'real wage' growth since 2023.

The UK's unemployment rate rose to 5.0% in the third quarter of 2025. This is the highest rate since May 2021 and was slightly worse than analysts had predicted (4.9%).

The total number of people out of work went up by 117,000 from the previous quarter, reaching 1.789 million. This increase was mostly seen in two groups: people who were recently unemployed (up to six months) and those who have been jobless for a very long time (over a year).

At the same time, the total number of people with jobs fell by 22,000 to 34.192 million. This was the first time employment has dropped since early 2024 and was mainly due to fewer full-time jobs.

Interestingly, the number of people holding a second job went up slightly to 1.33 million. Overall, the percentage of people with jobs (the employment rate) fell slightly to 75.0%.

The softer data has already seen market participants increase expectations of a December rate cut from the Bank of England.

European stocks continued their rise on Tuesday, mainly because investors were hopeful about a potential end to the record-long US government shutdown. This good feeling was also helped by some positive company earnings from telecom businesses like Vodafone.

The main European stock index, the STOXX 600, climbed 0.5%, hitting its highest level in two weeks. Global markets had a strong start to the week, with European stocks seeing their biggest daily gain in six months on Monday, as traders were relieved that the end of the US shutdown would mean the release of important government data would resume. The good news came late Monday when the US Senate approved a deal to restore federal funding and end the shutdown.

However, some investors remained cautious about what impact the lack of government funding so far might have had on the large US economy.

In company news:

• Vodafone shares jumped 5% after the British company raised its financial forecasts for the full year and reported a return to sales growth in Germany. This helped push the overall telecommunications sector higher.
• On the other hand, INWIT stock fell 8.4% after the major Italian mobile towers company lowered its revenue forecast for the next year, even though its quarterly profit had increased.

On the FX front, the Japanese Yen, which is generally considered a "safe-haven" currency, dropped to its lowest value since February on Tuesday.

At the same time, currencies viewed as "riskier" (like the Euro and the British Pound) were strong against the US Dollar. This shift is happening because traders are anticipating the long US government shutdown will end, which improves the market's overall mood and reduces the need for super-safe assets like the Yen.

The Euro remained stable at 1.1555, and the British Pound steadily increased to 1.3165.

In contrast, the New Zealand Dollar (NZD) continues to face pressure due to its slowing economy. It dipped 0.2% to 0.5635, close to its lowest point in seven months.

On Monday, the NZD hit its weakest level in 12 years against the Australian Dollar, which shows that the two neighboring countries have very different outlooks for their future interest rates.

Currency Power Balance

Oil prices fell slightly in Asian trading on Tuesday. This dip happened because worries about having too much oil available (oversupply) were more impactful than other factors.1 Those other factors included the uncertainty about what US penalties on major Russian oil companies like Rosneft and Lukoil would do, and the positive feelings about the US government possibly reopening.

The price for Brent crude oil futures dropped by 27 cents, or 0.4%, settling at 63.79 a barrel.US West Texas Intermediate (WTI) crude oil was also down by 27 cents, or 0.5%, priced at 59.86 a barrel.Both types of oil had actually seen their prices go up by about 40 cents in the trading session before this one.

Gold prices went up again on Tuesday, reaching their highest point in almost three weeks. This increase was mainly because people are increasingly expecting the US central bank (the Federal Reserve) to lower interest rates again in December. Also helping the price was the news that the U.S. government shutdown might be ending.

Specifically, spot gold (for immediate purchase) was up by 0.4% to 4,131.32/oz, and US gold futures (for December delivery) rose by 0.4% to 4,137.50/oz.

For more on Gold prices, read Gold (XAU/USD) Price Forecast: Bullish Breakout Gathers Pace as Fed Pivot Expectations Firm, $4250/oz Incoming?

The European session will bring German and Euro Area Zew sentiment data as well as comments from both Boe and ECB policymakers.

Attention will then turn to the US, where the Senate approved a bill to end the government shutdown yesterday. The House of Representatives is expected to vote on it in the next couple of days, and while it's not absolutely guaranteed, it is widely expected to pass.

In the coming days, markets may lack a clear direction.

On one hand, the prospect of the government reopening allows markets to relax about the negative effects the shutdown might have had on economic growth. On the other hand, the restart of official US economic data releases carries a real risk of negatively affecting the US Dollar. I think this second factor will be more important. In my view, markets are underestimating the potential negative news that might come out regarding the labor market and short-term US interest rates, which would ultimately push the Dollar lower toward the end of the year

From a technical standpoint, the FTSE 100 has broken out of the wedge pattern which has been in play of late.

The breakout sets the index up for a potential 220-odd point rally to the upside.

A retest of the wedge cannot be ruled out and may present a better risk-to-reward opportunity.

Immediate support rests at 9840 before the 9800 handle comes onto focus.

FTSE 100 Index Daily Chart, November 11. 2025

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