Markets remain positive as inflation concerns continue to wane

The inflation and recession dilemma that has been influential for some time is gradually losing its impact on asset prices, and it is observed that market pricing is being positively affected.

While demand for the 20-year bond auction held in the US was higher than expected, increasing selling pressure in the bond markets, analysts stated that this situation could indicate that investors' inflation concerns are diminishing.

Following the auction, the US 10-year bond yield hovered near its lowest level in about a month at 4.39 percent, while it is observed that yields on the inverted yield curve are continuing a normalization trend, albeit slowly.

Analysts noted that developments in the bond markets are effective in strengthening risk appetite, and stated that the Fed minutes to be released today and the earnings report of chip manufacturer Nvidia could increase volatility in the markets.

Fed officials also continue their verbal guidance, with Richmond Fed President Thomas Barkin reporting that data indicates the economy is growing while the pace of price increases is slowing, but that this progress is not enough for the Fed to declare victory against inflation. Reiterating that the focus is on bringing inflation down to the target level, Barkin stated that he sees inflation as "stubborn."

While the events following the removal of Sam Altman, co-founder of OpenAI, the developer of the artificial intelligence application ChatGPT, from his CEO position last week are being followed, Microsoft CEO Satya Nadella announced that Altman has joined Microsoft as the head of artificial intelligence research. Following the developments, Microsoft shares gained over 2 percent in value.

With these developments, the dollar index continues to decline, standing at 103.2 with a 0.2 percent decrease in the new day.

The ounce price of gold is finding buyers at $1,992 with a 0.8 percent increase, while the barrel price of Brent crude is currently trading at $82 with a 0.1 percent decline.

In the New York stock market yesterday, the Nasdaq index recorded its highest close since July 31, rising 1.13 percent, while the S&P 500 index rose 0.74 percent and the Dow Jones index rose 0.58 percent. Index futures in the US also started the new day with gains.

While a mixed trend stood out in European stock markets yesterday, developments in China, one of Europe's largest trading partners, continue to negatively affect asset prices.

Expectations that the European Central Bank (ECB) will keep policy rates at these levels for a long time continue to fuel concerns about slowing economic activity in the region.

ECB member Francois Villeroy de Galhau reported that the bank could keep policy rates at these levels for several quarters and could start disposing of assets acquired during the novel coronavirus (COVID-19) pandemic earlier than expected.

While the DAX 40 index in Germany and the FTSE 100 index in the UK fell by 0.11 percent, the CAC 40 index in France rose by 0.18 percent and the MIB 30 index in Italy rose by 0.15 percent. Index futures in Europe started the new day with a mixed trend.

Asian markets followed a buying-weighted trend, excluding Japan, while the "white list" announced regarding the real estate sector in China caused stock-based volatility to increase.

Analysts noted that the Chinese government's steps to resolve the issue were welcomed by the markets.

While the People's Bank of China (PBoC) continues to announce the parity in a way that supports the yuan, the dollar/yuan parity tested its lowest level since June 2 at 7.0837.

Near the close, the Nikkei 225 index in Japan was flat, while the Shanghai composite index in China gained 0.4 percent, and the Hang Seng index in Hong Kong and the Kospi index in South Korea gained 0.7 percent.

Domestically, the BIST 100 index on Borsa Istanbul, which followed a buying-weighted trend yesterday, completed the day with a 1.18 percent gain at 7,946.37 points.

The dollar/TL, after closing the day at 28.7483 with a 0.2 percent increase yesterday, is trading at 28.7600 at the opening of the interbank market today.

Analysts stated that in addition to the Chicago Fed national activity index, existing home sales, and Fed minutes in the US today, the news flow regarding the Israel-Palestine conflict continues to be in the focus of investors, and noted that technically, the 8,000 and 8,200 levels are resistance and 7,910 and 7,790 points are support for the BIST 100 index.

News Source: 12punto