Global markets turn their eyes to US inflation data

Global markets are following a cautious trend ahead of the inflation data to be released in the US today, while investors are also focused on forward guidance from Fed officials.

Uncertainty regarding whether the US Federal Reserve (Fed) will continue its "hawkish" monetary policies in the fight against inflation continues to maintain its importance in pricing, while question marks remain over how long interest rates will stay at high levels.

Analysts stated that the Consumer Price Index (CPI) data to be released in the US today could be influential on the Fed's future policies, adding that clues regarding the bank's upcoming steps will be sought in the speeches to be delivered by Fed Vice Chair Philip Jefferson and Chicago Fed President Austan Goolsbee at various events.

Reminding that the CPI in the US is expected to rise by 0.1 percent monthly and 3.3 percent annually in October, analysts stated that market volatility could increase after the data release.

Analysts emphasized that there is a risk of a partial government shutdown over the weekend if an agreement cannot be reached in the US Congress on the budget to provide funding for the federal government, noting that a prolonged shutdown could negatively affect the economy.

The US federal government's budget deficit was 66.6 billion dollars in October, the first month of the 2024 fiscal year, a 24 percent decrease compared to the same period last year.

Analysts stated that after international credit rating agency Moody's affirmed the US's "Aaa" credit rating but revised its outlook from stable to "negative," risks to the US government's financial strength are also being closely monitored.

According to the results of the Survey of Consumer Expectations for October published by the New York Fed, American consumers' short-term inflation expectation fell to 3.6 percent in October.

While US Treasury bond yields and the dollar index maintain their cautious course, the barrel price of Brent crude has extended its upward trend for the fourth consecutive trading day, influenced by signs that the demand outlook may not be as bad as previously feared, and is currently trading at 82.6 dollars.

The ounce price of gold, which completed the day yesterday with a 0.4 percent increase at 1,947 dollars, is currently finding buyers at 1,945 dollars, 0.1 percent below its previous close.

Analysts reminded that US President Joe Biden and Chinese President Xi Jinping will meet face-to-face for the first time in about a year during the week, stating that the signals from the meeting could be influential on the direction of the markets.

Furthermore, it is stated that stock and sector-based volatility may also increase during the ongoing earnings season in the country.

In the New York stock market yesterday, the Nasdaq index lost 0.22 percent and the S&P 500 index lost 0.8 percent, while the Dow Jones index recorded a 0.16 percent increase. Index futures in the US also started the new day with a mixed trend.

While a buying-weighted trend was seen in European stock markets yesterday, eyes are turned to ZEW indices and growth data across the region today.

Stating that the Eurozone is expected to grow by 0.1 percent annually in the 3rd quarter, analysts reported that forward guidance from European Central Bank (ECB) members will also be in the focus of investors during the day.

The DAX 40 index in Germany rose by 0.73 percent, the CAC 40 index in France by 0.60 percent, the FTSE 100 index in the UK by 0.89 percent, and the MIB 30 index in Italy by 1.48 percent. Index futures in Europe started the new day with a mixed trend.

A cautious trend also stands out in Asian stock markets.

In Asia, eyes are turned to the face-to-face meeting between US President Joe Biden and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit after about a year.

Analysts reminded that concerns regarding the recovery strength of the Chinese economy still persist, and this situation could be a major obstacle to global growth.

Near the close, the Nikkei 225 index in Japan gained 0.6 percent, the Shanghai composite index in China 0.1 percent, and the Kospi index in South Korea 1.2 percent, while the Hang Seng index in Hong Kong recorded a 0.2 percent decrease.

Domestically, the BIST 100 index in Borsa Istanbul, which followed a selling-weighted trend yesterday, completed the day with a 2.61 percent loss at 7,568.30 points.

The Dollar/TL, after closing the day yesterday at 28.5917 with a 0.1 percent increase, is trading at 28.6160 at the opening of the interbank market today.

According to the balance of payments data announced by the Central Bank of the Republic of Turkey (TCMB), the current account gave a surplus of 1 billion 876 million dollars in September 2023.

Analysts stated that the domestic data agenda is quiet today, while abroad, ZEW indices in Germany and the Eurozone, growth in the Eurozone, inflation data in the US, as well as news flow regarding the Israel-Palestine conflict will be followed, noting that from a technical perspective, the 7,500 and 7,420 levels are support, and 7,600 and 7,770 points are resistance for the BIST 100 index.