FTSE 100 consumer confidence data pushed London’s blue-chip index 0.6 per cent higher on Thursday, with miners leading the advance after gold climbed to its highest price since early June.
The GfK Consumer Confidence Barometer jumped three points in August to minus 14, the highest reading in nearly two years and well above the minus 25 recorded in April.
FTSE 100 Consumer Confidence Reading Points to Recovery
Four of the five GfK sub-indexes rose on the month. The index measuring personal finances over the past 12 months gained two points to minus 6. The forward-looking measure for personal finances over the next 12 months climbed three points to plus 4, while the gauge of whether now is a good time to make a major purchase rose five points to minus 7, its best level in that period.
Neil Bellamy, Consumer Insights Director at GfK, said the August headline score was ‘well ahead of the -25 registered just four months ago in April.’
Reuters reported Bellamy also cautioned that ‘with inflation back on the rise … and with continued uncertainty in the Middle East and elsewhere, there are still many challenges ahead that will test the mettle of UK consumers.’
Miners Rally as Metals Catch a Commodity Bid
The FTSE 100 consumer confidence bounce amplified gains already building in the mining sector. Antofagasta and Endeavour both climbed between four and five per cent. Anglo American, which is restructuring around copper, added 2.8 per cent as metals prices caught a broader commodity rally.
Gold reached $4,543 per ounce, its highest price since early June. The dollar fell to its lowest against major currencies since April.
Bessent’s Buyback Expansion Fails to Anchor Long-End Yields
In the US, Treasury Secretary Scott Bessent’s plan to expand buybacks of longer-dated government bonds dominated markets. Bessent announced on Wednesday plans to at least double the maximum size of liquidity-support buyback operations for longer-dated nominal coupon securities, raising the ceiling from $2 billion per operation to at least $4 billion per operation, effective 9 September, according to a US Treasury press release. The operations cover the 10-to-20-year and 20-to-30-year nominal coupon sectors.
The Treasury’s modern buyback programme launched in May 2024, initially capped at $2 billion per operation.
The announcement initially pushed 30-year yields down by 10 basis points. By Thursday they had reversed that move and risen by as much as eight basis points.
CNBC reported that Bessent, speaking on Squawk on the Street on 20 August, said the buybacks ‘could be more than the $4 billion per issue.’ The 30-year bond was trading around 5.235 per cent at the time, a level not seen since before the 2008 global financial crisis, CNBC reported. His remarks briefly eased yields, but that relief had largely reversed by the end of the session.
Neil Wilson, investor strategist at Saxo UK, said the programme ‘is not a fix for the key underlying reasons why yields have broken out higher.’
A further complication emerged days later. Bessent told CNBC’s Sara Eisen at the G20 Finance Ministers Meeting in Asheville, North Carolina on 31 August that ‘I haven’t bought anything yet,’ confirming the expanded programme had made no purchases as of that date.
The expanded operations go live on 9 September. Whether actual purchases at the higher ceiling can hold the 30-year yield below the 5.235 per cent level becomes the immediate test for both the Treasury and long-end bond markets.
