Global Markets Approach Data-Heavy Week with Caution
Expectations for the US Federal Reserve (Fed) to reduce interest rates in the first half of the year have been growing stronger, following recent data released in the USA. However, the cautious guidance from bank officials is causing uncertainties about when exactly the Fed will begin reducing interest rates.
Analysts are watching closely for macroeconomic data that will be announced in the USA this week, as it may provide clues about the Fed’s future actions. Additionally, all eyes are on the statements that Fed Chairman Jerome Powell will make in Congress within the week, as investors eagerly await any insights.
The Fed is expected to maintain its “wait and see” strategy, with analysts noting that the bank will make decisions based on data. Currently, the probability of the Fed’s first interest rate cut stands at 29 percent in May and 71 percent in June. The US 10-year treasury bond interest rate has decreased to 4.18 percent after signs of slowing inflation pressures and weakness in the manufacturing sector.
In response to these developments, the price of gold saw a 1.9 percent increase on Friday, reaching $2,083, its highest daily closing. Meanwhile, the dollar index experienced a slight decrease, closing at 103.9, and oil prices have been volatile due to geopolitical risks in the Middle East.
Cryptocurrency markets have seen a surge in the price of Bitcoin, reaching over $64,000, the highest level since November 2021. However, New York Community Bank shares plummeted over 25 percent after announcing problems in its internal controls and undergoing a change in leadership.
Moody’s and Fitch Ratings downgraded the credit ratings of New York Community Bank, causing concern among investors. Despite this, major US stock indices, including Nasdaq and S&P 500, reached all-time highs on Friday.
In Europe, investors are eagerly awaiting the interest rate decision of the European Central Bank (ECB) and the subsequent speech by ECB President Christine Lagarde. While the interest rate is expected to remain constant this week, volatility may increase in the markets depending on the data released.
Asian stock markets have shown a mixed trend, with the Nikkei 225 index in Japan reaching a historic high and China expected to announce new support packages for economic activity. The BIST 100 index in Turkey faced a sell-off trend but today’s focus is on inflation data.
Minister of Treasury and Finance Mehmet Şimşek expressed confidence in addressing inflation issues both globally and in Turkey. Today’s data releases will include Turkey’s CPI and PPI, as well as foreign currency assets and liabilities of companies outside the financial sector. Investors are keeping a close watch on these developments, as well as technical support and resistance levels in the markets.
