All eyes on the Fed's decisions to be announced this evening

While it is considered a certainty that the Fed will cut interest rates for the first time since 2020 this evening, uncertainties remain regarding the magnitude of the step the bank will take.

Pricing in money markets suggests a 65 percent probability that the Fed will cut interest rates by 50 basis points, while the possibility of a total of 125 basis points of rate cuts by the end of the year stands out.

Analysts noted that due to these uncertainties, the signals to be taken from the monetary policy statement and the remarks of Fed Chair Jerome Powell will be influential on asset prices, and reported that volatility in the markets is expected to increase following the announcements. According to data released yesterday in the US, retail sales recorded a 0.1 percent increase in August, contrary to expectations of a monthly decline.

Analysts stated that the unexpected increase in retail sales in August shows that consumer spending remains relatively strong. Industrial production in the US also increased by 0.8 percent in August on a monthly basis, exceeding market expectations.

On the corporate side, Intel shares gained 2.7 percent after the company announced that it is expanding its strategic collaboration with Amazon Web Services. With these developments, the US 10-year bond yield stabilized at 3.65 percent yesterday, and the dollar index stabilized at the 100.8 level with a 0.1 percent decrease.

The barrel price of Brent crude rose 0.9 percent yesterday, while it is at the 72.9 dollar level with a 0.4 percent loss in the new trading day. The ounce price of gold, which lost 0.5 percent yesterday, is currently trading at 2,568 dollars, 0.1 percent below the previous close.

Yesterday, the Dow Jones index fell 0.04 percent, while the S&P 500 index rose 0.03 percent and the Nasdaq index rose 0.20 percent. The S&P 500 index hit a record high during the day yesterday, reaching 5,670.81. Index futures contracts in the US started the new day with a positive trend. While a buying trend prevailed in European stock markets yesterday, inflation data to be announced in the UK and the Eurozone today are in the focus of investors.

Analysts stated that confidence that inflation is slowing down across the region has increased, noting that inflation concerns have been replaced by recession concerns. According to data released yesterday, the ZEW Economic Sentiment Index, which measures the expectations of institutional investors and analysts for the next 6 months, fell by 15.6 points in September compared to the previous month.

The index, which was 19.2 points in August, fell to the 3.6 point level this month, while investor confidence regarding the current situation in Germany fell to its lowest level since May 2020 in September.

European Central Bank (ECB) Governing Council member Gediminas Simkus noted in his statement yesterday that the probability of the ECB cutting interest rates again next month is low, stating, "It is natural that the probability of a cut in October is very low."

Yesterday, the DAX 40 index in Germany rose 0.50 percent, the CAC 40 index in France 0.51 percent, the FTSE 100 index in the UK 0.38 percent, and the FTSE MIB index in Italy 0.63 percent. Index futures contracts in Europe also started the new trading day with a positive trend.

On the Asian side, a cautious trend stands out in the new trading day, while there is no trading in equity markets in Hong Kong and South Korea due to public holidays. According to data released in the region today, Japan's foreign trade deficit in August was 695.3 billion yen.

Core machinery orders for July fell 0.1 percent monthly, coming in below estimates, while recording an 8.7 percent increase on an annual basis. The dollar/yen parity closed at 142.4 yesterday with a 1.3 percent increase, while it is at the 141.4 level, 0.7 percent below the previous close, in the new day.

Near the close, the Nikkei 225 index in Japan rose 0.2 percent, while the Shanghai composite index in China lost 0.1 percent. The BIST 100 index at Borsa Istanbul, which followed a buying-weighted trend yesterday, completed the day with a 1.89 percent increase compared to the previous close at 9,758.14 points.

The dollar/TL closed at 34.0808 yesterday with a 0.1 percent rise, and is trading at the 34.0830 level with a flat trend at the opening of the interbank market today. Analysts stated that short-term external debt statistics domestically, and inflation in the UK and the Eurozone, housing starts and building permits in the US, the Fed's interest rate decision, and Fed Chair Powell's statements abroad will be followed today, noting that from a technical perspective, the 9,800 and 9,900 levels are resistance, and 9,700 and 9,600 points are support for the BIST 100 index.

The data to be followed in the markets today are as follows:

09.00 UK, August Consumer Price Index (CPI)

10.00 Turkey, July short-term external debt statistics

12.00 Eurozone, August Consumer Price Index (CPI)

15.30 US, August housing starts

15.30 US, August building permits

21.00 US, Fed interest rate decision

21.30 US, Fed Chair Powell's press conference