Global markets maintain positive trend on "dovish" expectations
As expectations that the US Federal Reserve (Fed) could begin interest rate cuts in March of next year continue to influence asset prices in global markets, trading volumes remain at low levels following the Christmas holiday.
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Pricing in money markets suggests that the end of the Fed's 2-year battle against inflation is approaching, a situation that supports a buying-heavy trend in both equity and bond markets.
Accordingly, while the Dow Jones index on the New York Stock Exchange closed at a record high yesterday, the US 10-year bond yield tested its lowest level since July 20 at 3.78 percent. Thus, the US 10-year bond yield, which saw its highest level in the last 16 years at 5.02 percent during 2023, has declined by approximately 10 basis points since the beginning of the year.
These developments also brought about the highest daily closing in history for gold. Yesterday, the ounce price of gold completed the day with a 0.5 percent increase at 2,078 dollars. Continuing its upward trend in the new day, the ounce price of gold, which gained 0.4 percent in value to rise to 2,086 dollars, is supported by falling bond yields, which also reduce the alternative cost of gold.
On the other hand, the price of copper per pound recorded its highest close since July 31 yesterday with a 1.4 percent increase to 3.93 dollars, while expectations that economic activity worldwide will remain strong and that the US economy in particular could achieve a "soft landing" were effective in this rise.
It is noted that the increase in the price of the copper metal, also known as "Dr. Copper" in the markets, is interpreted as a sign that economic activity will remain strong due to its widespread use in global goods production.
Analysts stated that with these developments, the signals that macroeconomic data to be announced in the US today will provide regarding the course of the economy are important, and expressed that volatility may increase due to the thinness of the markets.
On the New York Stock Exchange yesterday, the Nasdaq index rose 0.16 percent, the S&P 500 index 0.14 percent, and the Dow Jones index 0.30 percent. Index futures in the US also started the new day with gains.
While European stock markets recorded limited gains yesterday upon returning from the holiday, the holiday mood continues across the region. There is no data on the macroeconomic calendar today, and trading volume is expected to remain low.
While the buying-heavy trend in US bond markets yesterday was also effective in Europe, Germany's 10-year bond yield fell to 1.9 percent, its lowest level since December 14, 2022.
Yesterday, the MIB 30 index in Italy rose 0.22 percent, the DAX 40 index in Germany 0.21 percent, the FTSE 100 index in the UK 0.36 percent, and the CAC 40 index in France 0.04 percent. Index futures in Europe also started the new day with gains.
In Asian equity markets, a buying-heavy trend stood out in the new day, excluding Japan, where there are concerns that the data released in the country could accelerate the Bank of Japan's (BoJ) process of abandoning its negative interest rate policy.
In Japan, retail sales increased by 5.3 percent annually in November, exceeding expectations, while industrial production slowed less than forecast at 0.9 percent in November.
The decline in bond yields in the US was effective in the rise of equity markets across the region, led by technology companies. The decrease in concerns regarding economic activity in China, even if limited, is fueling risk appetite.
Near the close, the Nikkei 225 index in Japan fell 0.4 percent, while the Kospi index in South Korea rose 1.3 percent, the Shanghai composite index in China 1.4 percent, and the Hang Seng index in Hong Kong 2.6 percent.
In the domestic market, the BIST 100 index on Borsa Istanbul, which followed a selling-heavy trend yesterday, completed the day with a 0.53 percent loss at 7,260.44 points.
The Dollar/TL, after closing the day at 29.3932, 1 percent above its previous close yesterday, is trading at the 29.4270 level at the opening of the interbank market today.
On the other hand, Minister of Labor and Social Security Vedat Işıkhan announced that the minimum wage for 2024 has been set at a net 17 thousand 2 Turkish Lira.
Analysts stated that the economic confidence index and weekly money and bank statistics will be followed domestically today, and wholesale inventories and weekly jobless claims will be followed abroad, noting that from a technical perspective, 7,200 and 7,100 points are support levels for the BIST 100 index, while 7,350 and 7,500 levels are resistance positions.