Mixed start to global markets this week
Central banks around the world are facing the challenge of loosening tight monetary policies to combat inflation. However, the struggle to reach targeted inflation rates is causing uncertainty in the global economy.
Last week, the US announced inflation data that was within expectations. Despite this, concerns persist that inflation pressures may remain strong in the future, making it difficult for markets to find direction. The pricing in the money markets indicates that the Federal Reserve (Fed) may reduce the policy rate by 25 basis points this month, with expectations of a total of two interest rate cuts next year dampening risk appetite.
Analysts are closely monitoring signals in the monetary policy text and statements from Fed Chairman Jerome Powell after the meeting. Any signals regarding future policies could potentially increase volatility in the markets. Additionally, there are concerns about the impact of policies that US President-elect Donald Trump may implement, such as tax cuts, tariffs, and immigration restrictions, leading investors to be cautious in their decisions.
In the US, the 10-year bond interest rate is currently at 4.39 percent, while the dollar index, reaching a peak of the last 2 years, started the week at 106.8. The price of gold and Brent oil is also fluctuating, influenced by the rise in the dollar index and bond interest rates.
Bitcoin is continuing its upward trend, currently trading at $105,100 after breaking the record by exceeding $106,000. In the corporate sector, semiconductor developer Broadcom saw a significant increase in its shares after reporting growth in artificial intelligence revenues.
In Europe, except for Italy, negative trends were observed in the stock markets following the release of macroeconomic data. Investors are focusing on statements from the President of the European Central Bank, Christine Lagarde. Monetary policy decisions from the Bank of England are also awaited, with expectations that the policy rate will remain constant.
In Asia, political uncertainties in South Korea and mixed economic signals from Japan and China are contributing to a negative trend in stock markets. China’s industrial production and growth forecast have shown positive signs, while investors are cautious about the Bank of Japan’s interest rate decision.
In domestic markets, the BIST 100 index at Borsa Istanbul closed positively on Friday. The Dollar/TL exchange rate saw a slight increase, and analysts are closely monitoring the budget balance, Lagarde’s speech, and global PMI data. The BIST 100 index faces resistance at 10,150 and 10,250 points, with support levels at 10,000 and 9,900.
