FX.co ★ FTSE 100 Extends Losses for 2nd Session

The FTSE 100 faced declines for the second straight day, falling by 0.9% on Tuesday following a 0.4% dip on Monday. This marks the index's most significant two-day drop since November. The downturn reflects investor anxiety stirred by escalating trade tensions, concerns over tariffs from President Donald Trump's discourse, and instability in Japanese government bonds that are impacting global markets. Adding to the frayed nerves is UK economic data suggesting a cooling labour market: wage growth maintained at 4.7%, while unemployment persisted at 5.1%, the highest level since 2021. Alarmingly, UK businesses reduced jobs at the most accelerated rate since 2020, with payroll data revealing a 43,000 decrease in employment numbers for December, which is double the anticipated drop. Nonetheless, market expectations barely shifted regarding potential Bank of England rate cuts, as traders perceive minimal likelihood of interest rate reductions in the near future.