Inflation and Treasury budget balance data to be closely watched in the US

Global markets are following a positive trend as expectations remain strong that the US Federal Reserve (Fed) will begin interest rate cuts in March, while investors are now focused on the inflation data to be released in the US today.

Signals from macroeconomic data in the US support forecasts that the country's economy could achieve a soft landing.

Analysts stated that the Consumer Price Index (CPI) data to be released in the US today could increase volatility in asset prices, noting that market expectations are for inflation to remain unchanged on a monthly basis due to the decline in energy prices and to be 3.1 percent annually.

Prior to the inflation data, the New York Fed released the results of its Survey of Consumer Expectations for November. Accordingly, American consumers' short-term inflation expectations fell to 3.4 percent in November, the lowest level since April 2021.

In money market pricing, the probability of the Fed starting interest rate cuts in March has risen to 50 percent, while the probability of such cuts beginning in May is at the 80 percent level.

Analysts, who stated that it is considered certain that the policy rate will be kept constant in the 5.25-5.50 percent range at the Federal Open Market Committee (FOMC) meeting, which begins today and whose decisions will be announced tomorrow, also expressed that Fed Chair Jerome Powell's forward guidance carries great importance.

While the US 10-year bond yield is at the 4.2 percent level, the dollar index is hovering at 104 with a 0.1 percent decrease.

Yesterday, the ounce price of gold, which completed the day at 1,981 dollars by declining 1.1 percent, is currently trading at 1,985 dollars, 0.2 percent above its previous close.

The barrel price of Brent crude oil is finding buyers at 76.6 dollars with a 0.4 percent increase today, carrying its upward trend to the fourth consecutive day.

On the other hand, shares of Macy's, one of the major US retail chains, gained over 19 percent in value yesterday following news that an investor group had made an offer to acquire the company for 5.8 billion dollars.

In the New York stock market yesterday, the Nasdaq index rose 0.20 percent, the S&P 500 index 0.43 percent, and the Dow Jones index 0.39 percent. Index futures in the US also started the new day with a positive trend.

While a positive trend stood out in Europe yesterday, excluding the UK, eyes are turned to the ZEW expectation indices across the region today.

Analysts reminded that it is considered certain that the European Central Bank (ECB) and the Bank of England (BoE) will keep interest rates unchanged at their meetings this week, stating that the US inflation data to be released today could also increase volatility in European equity markets.

On the other hand, the International Monetary Fund (IMF) Executive Board completed the second review of the 15.6 billion dollar loan program for Ukraine yesterday and approved the payment of 900 million dollars.

Yesterday, while the DAX 40 index in Germany rose 0.21 percent, the MIB 30 index in Italy 0.07 percent, and the CAC 40 index in France 0.33 percent, the FTSE 100 index in the UK lost 0.13 percent in value. Index futures in Europe also started the new day with a positive trend.

Positive trend also stood out in Asian markets

Analysts reported that if the US inflation data to be released today supports expectations that the Fed has reached the end of its hawkish steps, risk appetite in Asian equity markets could increase.

The fact that producer prices in Japan fell to their lowest level in nearly three years in November supported the Bank of Japan's (BoJ) view that inflationary pressure is easing.

The Producer Price Index (PPI) in Japan increased by 0.2 percent monthly and 0.3 percent annually in November.

The dollar/yen parity, which completed the day at the 146.2 level with a 0.9 percent increase yesterday, is currently at the 145.4 level, 0.5 percent below its previous close.

Near the close, the Nikkei 225 index in Japan rose 0.2 percent, the Kospi index in South Korea 0.4 percent, the Shanghai composite index in China 0.1 percent, and the Hang Seng index in Hong Kong 0.9 percent.

Domestically, the BIST 100 index in Borsa Istanbul, which followed a selling trend yesterday, completed the day with a 2.34 percent loss in value at 7,728.44 points.

The dollar/TL, after following a horizontal trend yesterday and closing the day at 28.9980, is trading at the 28.9970 level at the opening of the interbank market today.

Participating in the Board of Directors Meeting of the Foreign Economic Relations Board (DEIK) yesterday, Central Bank of the Republic of Turkey (TCMB) Governor Dr. Hafize Gaye Erkan drew attention to the importance of price stability for the real sector and stated that the contributions of central banks to social welfare can only be realized through monetary policy focused on price stability.

On the other hand, the International Investors Association (YASED) reported that 1 billion 188 million dollars worth of international direct investment entered Turkey in October.

In addition, Turkey's 5-year credit default swap (CDS) fell to 328 basis points yesterday, reaching its lowest level in approximately the last 3 years.

Analysts noted that the data agenda is quiet domestically today, while abroad, the unemployment rate in the UK, ZEW indices in the Eurozone and Germany, and inflation data and Treasury budget balance data in the US will be followed, and recorded that from a technical perspective, 7,600 and 7,550 points are support levels and 7,800 and 7,900 levels are resistance positions for the BIST 100 index.

News Source: 12punto