Global markets start the week on a positive note

Global markets began the week with a positive trend, driven by expectations that the U.S. Federal Reserve's (Fed) "hawkish" policies may have reached their end, while investors will focus on guidance from Fed officials this week, particularly remarks from Fed Chair Jerome Powell.

Macroeconomic data released worldwide suggest that policy interest rates may have reached their terminal levels.

In the U.S., non-farm payrolls increased by 150 thousand in October, while the unemployment rate rose from 3.8 percent to 3.9 percent, reaching its highest level in 21 months.

Average hourly earnings, which the Fed monitors closely and were expected to rise by 0.3 percent, increased by 0.2 percent to reach 34 dollars.

Analysts noted that the employment growth, which remained below expectations in the U.S., indicates that the country's tight labor market is beginning to loosen, and that investor expectations that the Fed may have finished its interest rate hikes have increased.

Noting that the probabilities for interest rate hikes in the next 3 meetings have declined significantly in money market pricing, analysts stated that it is anticipated the Fed could begin interest rate cuts in June of next year.

Following the U.S. non-farm payroll data, the 10-year Treasury bond yield tested below 4.50 percent, while it stabilized at 4.58 percent on the first trading day of the week.

The U.S. Institute for Supply Management (ISM) services sector Purchasing Managers' Index (PMI) came in at 51.8, below market expectations, signaling a slowdown in growth in the services sector. The October services sector PMI data released by S&P Global was revised from 50.9 to 50.6.

As Fed officials made statements following the data, Richmond Fed President Thomas Barkin pointed out that the labor market is in better balance, stating that he does not know whether the Fed has reached the peak in interest rates.

Minneapolis Fed Bank President Neel Kashkari also noted that there is a great deal of uncertainty regarding what is driving bond yields, and that the slowing of the labor market is positive.

Atlanta Fed President Raphael Bostic, on the other hand, stated that considering the economic outlook, the Fed's policy is likely in the right place, and expressed that he expects slow and steady progress in inflation.

Analysts noted that in addition to Fed Chair Powell's speech on Thursday, guidance from Fed officials throughout the week is expected to be influential on asset prices.

Meanwhile, reminding that the earnings season continues, analysts stated that commodity prices began the new week with a mixed trend.

Accordingly, while the ounce price of gold decreased by 0.5 percent to 1,983 dollars, the barrel price of Brent crude oil increased by 0.2 percent to 85.1 dollars, and the price of copper per pound rose by 0.8 percent to 3.69 dollars.

On Friday, the Dow Jones index rose by 0.66 percent, the S&P 500 index by 0.94 percent, and the Nasdaq index by 1.38 percent on the New York Stock Exchange. Index futures in the U.S. began the new week with a mixed trend.

While a mixed trend stood out in European stock markets on Friday, a busy data agenda will be the focus of investors throughout the week.

Analysts stated that macroeconomic data released in the region recently indicate that inflation is declining, and this situation is interpreted as the end of the "hawkish" policies of the European Central Bank (ECB) and the Bank of England (BoE).

Stating that policy interest rates in the region are expected to remain at these levels for a while to continue suppressing inflation, analysts said that statements from central bank officials this week could be influential on asset prices.

On Friday, the DAX 40 index in Germany rose by 0.3 percent and the MIB 30 index in Italy by 0.69 percent, while the CAC 40 index in France fell by 0.19 percent and the FTSE 100 index in the UK by 0.39 percent. Index futures in Europe began the new week with a mixed trend.

The positive trend recorded in the U.S. on Friday carried over to Asian stock markets on the first trading day of the new week, and the strengthening expectation that interest rate hikes in the West are nearing an end is positively affecting technology companies in Asia in particular.

Bank of Japan (BoJ) Governor Kazuo Ueda maintained his "dovish" stance in his statements today, stating that it is not yet clear when the Bank will begin normalization. However, Ueda noted that the probability of reaching the 2 percent inflation target is increasing, but that they still need to wait for this situation.

On the other hand, although concerns regarding real estate companies in China persist, news flow regarding a few companies is positively affecting asset prices.

South Korea's lifting of the short-selling ban on stock markets until June 2024 supported South Korean markets.

Near the close, the Nikkei 225 index in Japan rose by 2.3 percent, the Kospi index in South Korea by 4.4 percent, the Hang Seng index in Hong Kong by 1.6 percent, and the Shanghai composite index in China by 0.7 percent.

Domestically, the BIST 100 index on Borsa Istanbul, which followed a buying-weighted trend on Friday, completed the day with a 0.55 percent increase at 7,705.99 points.

On Friday, Turkey's 5-year credit default swap (CDS) fell to 367.52 basis points, seeing its lowest level in 2 years, while international credit rating agency Fitch Ratings raised its medium-term potential growth forecast for the Turkish economy from 3.9 percent to 4.1 percent.

The Dollar/TL, after completing the day at 28.3891 with a 0.1 percent increase on Friday, is trading at 28.4210 at the opening of the interbank market today.

Analysts stated that today, the real effective exchange rate domestically, and factory orders, services sector and composite Purchasing Managers' Index (PMI) in Germany, as well as services sector and composite PMI data in the Eurozone, along with news flow regarding the Israel-Palestine conflict will be monitored, noting that technically, the 7,760 and 7,880 levels are resistance and the 7,600 point level is support for the BIST 100 index.

News Source: 12punto