Global markets start the week cautiously

While central banks announced their final monetary policy decisions of the year last week, the signals received regarding the coming period, although fueling an optimistic atmosphere that interest rate cuts could begin next year, were dampened by the statements made by Fed officials on Friday.

While New York Fed President John Williams stated that it is even too early to think about the timing of interest rate cuts, Atlanta Fed President Raphael Bostic also expressed that if inflation falls as expected, the bank could begin lowering interest rates in the third quarter of 2024.

Chicago Fed President Austan Goolsbee also noted that the Fed might need to start shifting its focus from inflation to the slowing labor market, stating that it is an exaggeration to consider interest rate cuts until inflation is convincing in terms of reaching the target.

Analysts stated that risk appetite in equity markets has lost strength following the cautious forward guidance from Fed officials, and reported that the intense macroeconomic data agenda this week is the focus of investors.

In pricing in money markets, while it is considered certain that the Fed will keep interest rates unchanged in January, when it will hold its first meeting of next year, the probability of the bank starting interest rate cuts in March stands at 75 percent.

Following these developments, the dollar index, which completed the day on Friday with a 0.6 percent increase at the 102.6 level, started the new week at 102.5, 0.1 percent below its previous close.

The ounce price of gold, which closed at 2,018 dollars with a 0.9 percent decline on the last trading day of last week, is currently trading at 2,024 dollars, an increase of 0.3 percent compared to its previous close.

The barrel price of Brent oil, which has carried its upward trend to the fourth consecutive trading day, is currently at 77.1 dollars, just above its previous close.

On the equity market side, while it was noteworthy that DocuSign shares gained over 12 percent on Friday following news that the company had consulted advisors regarding a possible sale, Costco shares also rose over 4 percent after the retail chain's financial results exceeded expectations.

In the New York stock market on Friday, the Nasdaq index rose 0.35 percent and the Dow Jones index rose 0.15 percent, while the S&P 500 index lost 0.01 percent in value. Index futures in the U.S. started the new week with gains.

A mixed trend stood out in European stock markets on Friday.

While the European Central Bank (ECB) and the Bank of England (BoE) left interest rates unchanged in line with expectations last week, ECB President Christine Lagarde emphasized that the bank has not discussed interest rate cuts at all.

On Friday, ECB member Joachim Nagel said it was too early to think about interest rate cuts, while another member, Madis Muller, expressed that markets were acting prematurely in betting on policy easing in the first half of next year.

Analysts stated that the forward guidance from ECB members lowered risk appetite in the markets, and reported that the "hawkish" stance in the announcement made by the BoE after its interest rate decision also postponed expectations regarding a possible interest rate cut.

On the other hand, the euro/dollar parity, which completed the day at 1.0900 with a 0.8 percent decrease on the last trading day of last week, started the new week at 1.0910, 0.1 percent above its previous close.

On Friday, the MIB 30 index in Italy rose 0.05 percent and the CAC 40 index in France rose 0.28 percent, while the FTSE 100 index in the UK lost 0.95 percent in value. The DAX 40 index in Germany followed a flat course. Index futures in Europe also started the new week with a mixed trend.

While a negative trend dominates Asian markets, attention has turned to the Bank of Japan's (BoJ) monetary policy meeting, which starts today and ends tomorrow.

Analysts noted that it is expected that the BoJ's status as the last central bank to implement a negative interest rate policy may soon come to an end, stating that the bank is in no hurry for a policy change but could give the first signals of normalization steps at this meeting.

The dollar/yen parity, which completed the day at 142.1 with a 0.2 percent increase on the last trading day of last week, is currently at 142.2, just above its previous close.

Near the close, the Nikkei 225 index in Japan fell 0.7 percent, the Shanghai composite index in China fell 0.2 percent, and the Hang Seng index in Hong Kong fell 0.9 percent, while the Kospi index in South Korea gained 0.2 percent in value.

Domestically, in Borsa Istanbul, which followed a buying-weighted trend on Friday, the BIST 100 index completed the day with a 2.31 percent gain at 7,993.85 points, while eyes this week have turned to the TCMB's interest rate decision.

The dollar/TL, after closing the last trading day of last week at 29.0075, 0.1 percent above its previous close, following an upward trend, is trading at 28.9940 at the opening of the interbank market today.

Turkey's 5-year credit default swap (CDS), which has been on a downward trend since the end of May with the steps taken by the new economic management, also fell below 300 basis points for the first time since March 2021 last week, dropping to 289 basis points.

On the other hand, international credit rating agency Moody's announced that no evaluation was made regarding Turkey's credit rating, and currently evaluates Turkey's credit rating as "B3" and its outlook as "stable".

Economists participating in the AA Finance expectation survey regarding the TCMB's Monetary Policy Committee (PPK) meeting estimate that the bank will increase the one-week repo auction interest rate (policy rate) by 250 basis points to 42.50 percent.

Analysts stated that the international investment position and housing price index will be followed domestically today, and the Ifo business climate index in Germany will be followed abroad, noting that from a technical perspective, 8,000 and 8,100 points are resistance levels for the BIST 100 index, and 7,900 and 7,800 levels are support positions.