How did global markets start the day? Uncertainty continues

In global markets, uncertainty regarding data to be released in the second half of the week and the future policies of major central banks is reducing risk appetite. Yesterday, Atlanta Fed President Raphael Bostic stated that he expects only one interest rate cut this year, noting that the economy is still in a Covid-19 pandemic state and that he expects a gradual slowdown in the economy and inflation.

While uncertainty continues regarding the timing and pace of the interest rate cuts expected to begin this year, the cautious tone in the forward guidance provided by US Federal Reserve (Fed) officials yesterday helped strengthen selling pressure in equity markets.

Chicago Fed President Austan Goolsbee also said that the idea of 3 interest rate cuts this year is appropriate. Stating that the narrative does not seem to have fundamentally changed, Goolsbee expressed that it is necessary to see that the progress made on inflation is on a downward trend.

Fed Board Member Lisa Cook, on the other hand, emphasized that the Fed should adopt a cautious approach while lowering interest rates to allow more time for inflation to slow down in some parts of the economy.

Analysts reported that following the cautious forward guidance from Fed officials, the probability of the bank making its first interest rate cut in June has fallen to 70 percent in money markets. During this period, the probability of the Fed cutting interest rates was at 75 percent before the statements from bank officials.

Stating that a busy data agenda will be followed throughout the week in addition to the forward guidance from Fed officials, analysts noted that growth data and personal consumption expenditures, which the Fed considers as an inflation indicator, could provide signals regarding the steps the bank will take in the coming period.

On the other hand, according to data released yesterday in the US, new home sales in the US decreased by 0.3 percent on a monthly basis in February to 662 thousand, falling below market expectations.

The median sales price of new homes sold last month in the US fell by approximately 7.6 percent on an annual basis to 400 thousand 500 dollars, recording its lowest level in 2.5 years.

Following these developments, the US 10-year bond yield finished the day with a 5 basis point increase at 4.25 percent yesterday, and is currently at 4.24 percent.

The ounce price of gold is hovering near its peak at 2 thousand 172 dollars, while the dollar index is at 104.2, just below its previous close.

In addition to geopolitical risks, expectations that OPEC+ may continue its production cuts continue to support oil prices upward. The barrel price of Brent oil finished the day with a 1.2 percent increase at 86.1 dollars yesterday, and is trading just above its previous close at these moments.

Yesterday, in the New York stock market, the Nasdaq index recorded a 0.27 percent decrease, the S&P 500 index a 0.31 percent decrease, and the Dow Jones index a 0.41 percent decrease. Index futures in the US also started the new day with a negative trend.

While a mixed trend stood out in European stock markets yesterday, forward guidance from central bank officials and the macroeconomic data agenda in the region continue to be the focus of investors.

Yesterday, European Central Bank (ECB) Chief Economist Philip Lane stated that there is a growing consensus within the ECB Governing Council regarding a possible interest rate cut, expressing increased confidence that wage growth is slowing.

On the other hand, the European Union (EU) announced that it has launched an investigation to determine whether Apple, Alphabet, and Meta are complying with the rules under the Digital Markets Act.

Yesterday, while the FTSE 100 index in the UK fell by 0.17 percent, the MIB 30 index in Italy gained 0.86 percent and the DAX 40 index in Germany gained 0.30 percent. The CAC 40 index in France finished the day flat. Index futures in Europe started the new day with a negative trend.

While a negative trend also stood out in Asian equity markets, it was noteworthy that the Kospi index in South Korea tested its peak of the last two years.

While the falling risk appetite in global equity markets also affected Asian equity markets, core inflation in Japan remained below expectations with a 2.3 percent increase.

On the other hand, Japanese Finance Minister Shunichi Suzuki stated in his statement today that they would not rule out any measures to curb the weakness in the yen.

Stating that a weak yen has both positive and negative aspects for the economy, Suzuki emphasized that excessive volatility increases uncertainty for business operations.

The dollar/yen parity, which has carried its downward trend to the third consecutive trading day, is currently at 151.5, just below its previous close.

Near the close, the Nikkei 225 index in Japan lost 0.1 percent, the Shanghai composite index in China 0.4 percent, and the Hang Seng index in Hong Kong 0.1 percent, while the Kospi index in South Korea recorded a 0.7 percent increase. The Kospi index tested its highest level of the last two years by exceeding 2,779 points during the day.

In Borsa Istanbul, which followed a volatile trend domestically yesterday, the BIST 100 index finished the day with a 0.90 percent loss at 9,029.38 points.

Dollar/TL, after finishing the day at 32.1469, 0.4 percent above its previous close, by following a buying trend yesterday, is trading at 32.1730 at the opening of the interbank market today.

Analysts noted that the data agenda is quiet domestically today, while abroad, the Gfk consumer confidence index in Germany, and durable goods orders, housing price index, consumer confidence index, and Richmond Fed Manufacturing Index data in the US will be followed, and stated that from a technical perspective, the 9,000 and 8,900 levels are support, and 9,200 and 9,350 points are resistance for the BIST 100 index.

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

10.00 Germany, April Gfk consumer confidence index

15.30 US, February durable goods orders

16.00 US, January housing price index

17.00 US, March New York Fed consumer confidence index

17.00 US, March Richmond Fed Manufacturing Index