Global markets seek direction following Fed officials' comments

Although world economies have made significant progress in the fight against inflation, statements suggesting that there is still a long way to go before declaring victory are strengthening uncertainties in the markets.

Fed officials, who made statements yesterday, caused volatility to increase in the markets, while Minneapolis Fed President Neel Kashkari stated that despite the decline in price pressures, it is too early to declare victory in their fight against inflation.

Fed Board Member Lisa Cook also stated that they hope the policy rate will be restrictive enough to ensure that inflation returns to the bank's 2 percent target. Cook emphasized that they will continue to remain cautious to ensure the inflation target is reached.

While pricing in money markets suggests that the bank will most likely keep the policy rate unchanged in the next three meetings, analysts reported that the statements of Fed officials are leading investors to be cautious.

Analysts drew attention to the importance of the statements to be made by Fed Chair Jerome Powell on Thursday, noting that the tone of Powell's speech will affect asset prices following the data released on the labor market last week.

Yesterday, selling pressure was seen to come to the fore again in bond markets. As Fed officials emphasized that the fight against inflation is not yet over and ahead of the bond sales that will begin today by the US Treasury, the US 10-year bond yield increased by approximately 15 basis points to 4.65 percent.

The US Treasury plans to sell 48 billion dollars worth of 3-year bonds in today's bond auction. While it is expected that 40 billion dollars worth of 10-year bonds will be sold in tomorrow's auction and 24 billion dollars worth of 30-year bonds on Thursday, analysts stated that the bond yields that will emerge in these auctions are expected to have an impact on the markets.

While the increase in volatility in commodity prices also stands out, the ounce price of gold, which fell by 0.8 percent yesterday, continues its decline in the new day and is finding buyers at 1,973 dollars, 0.2 percent below the previous close.

While the barrel price of Brent crude oil fell by 0.7 percent to 84.7 dollars, concerns regarding the Chinese economy are also effective in this movement.

In the New York stock market, the Dow Jones index rose by 0.1 percent, the S&P 500 index by 0.18 percent, and the Nasdaq index by 0.3 percent. Index futures in the US started the new day with a decline.

In European stock markets, a selling-weighted trend stood out yesterday, excluding the UK, while macroeconomic data in the region continues to give mixed signals.

Accordingly, while the service sector and composite Purchasing Managers' Index (PMI) in the Eurozone were realized as 47.8 and 46.5, respectively, indicating that the contraction continues, factory orders in Germany increased by 0.2 percent in September, contrary to expectations.

While European Central Bank (ECB) members continued their forward guidance yesterday, according to reports in the European press, ECB member Robert Holzmann stated that the ECB should be ready to raise interest rates again if necessary.

While the DAX 40 index in Germany fell by 0.35 percent, the MIB 30 index in Italy by 0.29 percent, and the CAC 40 index in France by 0.48 percent, the FTSE 100 index in the UK followed a flat course. Index futures in Europe started the new day with a decline.

While selling pressure stands out in Asian stock markets in the new day, the data released in China continues to fuel concerns that the world economy is slowing down.

Accordingly, while the country's exports decreased by 6.4 percent last month and did not meet expectations, imports exceeded forecasts with a 3 percent increase. Speaking at a financial summit in Hong Kong, Deputy Governor of the People's Bank of China Zhang Qingsong stated that the bank has well-regulated economic programs for the Chinese economy.

The Reserve Bank of Australia (RBA) raised its policy rate by 25 basis points to 4.35 percent today after 4 meetings.

In the statement made by the bank, emphasis was placed on the concern that high inflation may remain high for longer than expected.

Near the close, the Nikkei 225 index in Japan fell by 1.3 percent, the Kospi index in South Korea by 2.5 percent, the Hang Seng index in Hong Kong by 1.4 percent, and the Shanghai composite index in China by 0.1 percent.

Domestically, the BIST 100 index in Borsa Istanbul, which followed a buying-weighted trend yesterday, completed the day with a 2.10 percent increase at 7,868.02 points.

The Dollar/TL, after completing the day at 28.4386 with a 0.2 percent increase yesterday, is trading at the 28.4680 level at the opening of the interbank market today.

Analysts stated that today, the treasury cash balance domestically, and industrial production in Germany, the house price index in the UK, the Producer Price Index (PPI) in the Eurozone, and foreign trade balance data in the US, as well as the news flow regarding the Israel-Palestine conflict, will be followed, and noted that from a technical perspective, the 7,950 and 8,020 levels are resistance and 7,800 and 7,750 points are support positions for the BIST 100 index.

News Source: 12punto