Markets turn their eyes to inflation in the US

Global markets are following a positive trend ahead of the inflation data to be announced in the US today.

Uncertainty continues regarding when major central banks, which are expected to begin interest rate cuts this year, will actually start these reductions.

Analysts, noting that the Consumer Price Index (CPI) data to be released in the US today could shape the Fed's future interest rate decisions, reminded that annual inflation in the country is expected to be 3.2 percent.

Emphasizing that this data could be influential on the direction of the markets, analysts also stated that the earnings season, which will intensify starting tomorrow, could increase stock and sector-based volatility.

Major US banks JPMorgan Chase, Citibank, Bank of America, and Wells Fargo are expected to announce their corporate financial results tomorrow.

Ahead of the inflation data, money markets are pricing in a near-certainty that the Fed will keep interest rates unchanged at its January meeting, while there is a 67 percent probability of the first interest rate cut occurring at the March meeting.

While statements from Fed officials were also monitored yesterday, New York Fed President John Williams said he believes a restrictive policy stance will need to be maintained for some time to fully reach the inflation target.

Noting that the Fed could lower interest rates when it is confident that inflation is heading toward 2 percent, Williams stated that he projects inflation to fall to 2.25 percent in 2024 and to 2 percent in 2025.

Taking into account the effects of restrictive monetary policy, Williams reported that he expects the US economy to grow by approximately 1.25 percent this year and the unemployment rate to rise to 4 percent.

According to data released yesterday, the average interest rate for a 30-year fixed-rate mortgage in the US rose to 6.81 percent last week, while mortgage applications recorded a 9.9 percent increase.

The US Securities and Exchange Commission (SEC) approved the spot Bitcoin Exchange Traded Fund (ETF) yesterday, which has been a focus of the cryptocurrency markets for some time.

Following the SEC's announcement that it had approved spot Bitcoin ETF applications, SEC Chair Gary Gensler recalled that the commission had not approved more than 20 spot Bitcoin ETF applications until March 2023, stating that they were facing a new series of similar applications but that circumstances had changed.

Reminding that a federal court in the US found the SEC's rejection of Grayscale's application in this scope to be erroneous last year, Gensler stated that he believes the most sustainable path forward is to approve the listing and trading of spot Bitcoin ETF shares.

Following this development, while volatility in Bitcoin increased, it is currently trading above 46 thousand dollars, following a trend near its highest level in approximately the last 2 years.

Ahead of the US inflation data, the dollar index is at 102.2 with a 0.1 percent decrease, while the ounce price of gold is finding buyers at 2 thousand 32 dollars, 0.4 percent above its previous close.

The US 10-year treasury bond yield, which rose by approximately 3 basis points yesterday to 4.04 percent, is at the 4.02 percent level today.

Yesterday, in the New York stock market, the S&P 500 gained 0.57 percent, the Dow Jones index 0.45 percent, and the Nasdaq index 0.75 percent. Index futures in the US also started the new day with a positive trend.

While a mixed trend stood out in European stock markets yesterday, uncertainties regarding the European Central Bank's (ECB) future monetary policy and economic activity across the region continue to dampen risk appetite.

Analysts, reminding that the verbal guidance of ECB members is being followed this week, stated that the statements coming from the members have not helped to eliminate the uncertainties.

Accordingly, while ECB member Isabel Schnabel noted that it is still too early for an interest rate cut, another ECB member, Luis de Guindos, expressed that current interest rates are their greatest aid in the fight against inflation.

Yesterday, while the FTSE 100 index in the UK lost 0.42 percent and the CAC 40 index in France lost 0.01 percent, the DAX 40 index in Germany gained 0.01 percent and the MIB 30 index in Italy gained 0.1 percent. Index futures in Europe started the new day with a positive trend.