Latest Developments in the Markets
Last week, weak US economic data fueled growth concerns and caused volatility in global markets, reflected in declines in Asian stock markets. Borsa Istanbul also opened with a loss of value due to these global negative effects. Circuit breakers were put into effect to prevent investors from making sudden sales.
Fed’s Emergency Meeting
The US Federal Reserve (Fed) has decided to hold an emergency meeting to discuss new measures to ensure stability in the markets following the crash in the Japanese stock market. This meeting is considered as a signal for an interest rate cut.
The meeting is expected to discuss in detail the measures to be taken to ensure global economic stability. It is stated that this situation is perceived as a signal to the markets for an interest rate cut. While US bond market players are acting with concerns that the economy may deteriorate rapidly, expectations are increasing that the Fed will take a relaxation step before the regular meeting date.
Evaluations on the Fed’s Interest Rate Policy
Last week’s weak US data sent global stock markets into sharp declines, with investors pricing in a 60% chance of a 25 basis point rate cut from the Fed next week.
Developments in the Japanese Stock Exchange
In Japan, the Nikkei index suffered major losses for financial and export stocks. For example, shares of Sumitomo Mitsui Financial Group lost 16%. The Nikkei index’s decline today was the biggest single-day crash since “Black Monday” in October 1987.
- Highlights:
- The US Federal Reserve’s emergency meeting decision.
- The probability of a 25 basis point rate cut from the Fed is 60%.
- Big declines in the Nikkei index.
- Sumitomo Mitsui Financial Group’s 16% decline.
