As the fight against inflation around the world nears its end, meetings to be held this week are expected to provide clues about banks’ roadmap. The fact that inflationary pressures have decreased in the US without economic activity losing as much strength as was feared is allowing “soft landing” scenarios to come to the forefront and also feeding risk appetite.
While it is almost certain that the US Federal Reserve (Fed) will leave the policy rate unchanged for the last time at 5.25-5.50 percent on Wednesday, the signals to be received from the policy text, economic projections and Fed Chairman Jerome Powell’s statements are expected to be decisive on the direction of asset prices.
While pricing in money markets indicates that the Fed may cut interest rates three times during the rest of the year, it is anticipated that the signals to be received from the Fed as well as the data in the employment report to be announced on Friday may reduce the question marks about the bank’s interest rate cut.
On the other hand, the earnings season will continue intensively this week. It is estimated that the financial results to be announced by giant companies such as Apple, Microsoft, Amazon and Meta Platforms will increase stock and sector-based volatility.
Bond markets started the week with a busy buying trend, with the US 10-year bond yield currently down to 4.18 percent. The dollar index is also down 0.1 percent to 104.3.
The ounce price of gold started the week with a 0.3 percent increase at $2,393, while the barrel price of Brent oil increased by 1.2 percent to $80.7.
While the US elections are also being closely followed by investors, former US President and Republican presidential candidate Donald Trump announced that he plans to make the US “the crypto capital of the planet and the Bitcoin superpower of the world.”
Following Trump’s statements, cryptocurrencies are seen to have increased volatility, with Bitcoin currently trading at $69,700.
On Friday, the Nasdaq index rose 1.03 percent, the S&P 500 index rose 1.11 percent and the Dow Jones index rose 1.64 percent on the New York Stock Exchange. Index futures contracts in the US also started the new week with an increase.
In Europe, investors’ focus this week will be on the Bank of England’s (BoE) interest rate decision, as well as inflation and growth data to be released across the region.
While it is almost certain that the BoE will keep the policy rate unchanged at its meeting on Thursday, the signals from the policy text and BoE Governor Andrew Bailey’s statements and guidance are expected to provide clues about the steps to be taken in the upcoming period.
While concerns about economic activity in the region have grown stronger following the data released last week, it is being monitored how the growth and inflation data to be released this week will affect these concerns.
On Friday, the FTSE 100 index in England rose 1.21 percent, the CAC 40 index in France rose 1.22 percent, the DAX 40 index in Germany rose 0.65 percent and the MIB 30 index in Italy rose 0.12 percent. Index futures contracts in Europe also started the new week with an increase.
While the buying-heavy trend that was prominent on the New York Stock Exchange on Friday was seen to be carried over to Asian stock markets on the first trading day of the week, the monetary policy decisions to be announced by the Bank of Japan (BOJ). ) on Wednesday will be closely followed.
While pricing in money markets predicts that the bank will keep the policy rate constant with a 70 percent probability, it is also estimated that it may increase it by 10 basis points with a 30 percent probability.
By the close of trading, Japan’s Nikkei 225 index had risen by 2.6 percent, South Korea’s Kospi index had risen by 1.2 percent, Hong Kong’s Hang Seng index had risen by 1.9 percent and China’s Shanghai composite index had risen by 0.1 percent.
Moving within a narrow band on Friday, the BIST 100 index on Borsa Istanbul closed the day at 10,891.42 points, up 0.18 percent compared to the previous close.
After following a horizontal course on Friday and completing the day at 32.9456, just below its previous close, the USD/TRY is being traded at 32.9690 at the opening of the interbank market today.
Analysts stated that the data agenda is calm in the country today, and that the Dallas Fed manufacturing industry index data in the USA will be followed abroad, and noted that from a technical perspective, 10,800 and 10,700 points are support in the BIST 100 index, while 10,900 and 11,000 are resistance levels.
