Soft landing expectations drive positive trend in global markets

Across the world, the Fed's decision on Wednesday, the U.S.economy's future trajectory continues to be evaluated, while the possibility of avoiding a recession the possibility is fueling risk appetite.

Fed's projections anticipate another 50 basis point cut by the end of the year, while market expectations lean toward a 75 basis point cut by year-end.

In this context, the importance of upcoming employment data is seen to be increasing, while signals regarding economic activity also remain in the focus of investors. According to data released in the country yesterday, the number of people filing for unemployment benefits for the first time fell to 219,000 in the week ending September 14, coming in below market expectations.

The US current account deficit increased by 10.7 percent in the second quarter of the year, rising to 266.8 billion dollars. On the corporate side, the rise in technology stocks led the positive trend in the markets, with shares of chip manufacturers Nvidia rising 3.9 percent and AMD rising 5.7 percent.

Shares of US tech giants Apple gained 3.7 percent, Meta 3.9 percent, Microsoft 1.8 percent, and Alphabet 1.5 percent. With these developments, the US 10-year bond yield is currently at 3.72 percent, while the dollar index has stabilized at 100.6.

The barrel price of Brent crude rose 2.4 percent yesterday due to the positive atmosphere in the markets, while it is trading at 74 dollars with a 0.2 percent loss in the new trading day. The ounce price of gold closed at 2,587 dollars yesterday with a 1.1 percent increase and is currently trading at 2,594 dollars, 0.3 percent above its previous close.

Yesterday, the Dow Jones index rose 1.26 percent, S&P 500 index rose 1.70 percent, and the Nasdaq index rose 2.51 percent. S&P 500 index hit a record high of 5,733.57, and the Dow Jones index reached 42,160.91. US index futures started the new day with a negative trend. While a buying-weighted trend prevailed in European stock markets yesterday, the Bank of England (BoE) kept its policy rate unchanged at 5 percent, in line with expectations.

In the statement made by the bank, it was conveyed that the Monetary Policy Committee (MPC) determines monetary policy to reach the 2 percent inflation target and at the same time ensure sustainable growth. In his assessment following the decision, BoE Governor Andrew Bailey stated that inflationary pressures have continued to ease since they lowered the policy rate in August, saying, "The economy is generally progressing as we expected. If this continues, we can gradually lower the policy rate over time. However, it is vital that inflation remains low, so we must be careful not to cut the policy rate too quickly or too much."

The Fed's 50-basis-point rate cut was also welcomed in regional markets, with Germany's DAX 40 index hitting a record high of 19,044.96 points during the day and achieving its all-time high close at 19,002.38 points. Analysts stated that the Fed entering a easing cycle could provide a more favorable environment for the European Central Bank (ECB) to loosen monetary tightness in its steps by the end of the year, adding that it could also support the BoE's future easing steps.

Yesterday, the DAX 40 index in Germany rose by 1.55%, the CAC 40 index in France by 2.29%, the FTSE 100 index in the UK by 0.91%, and the FTSE MIB index in Italy by 1.16%. Index futures in Europe started the new trading day with a negative trend. On the Asian side, on the last trading day of the week, a positive trend stands out, with the exception of China, following the Bank of Japan's decision to keep interest rates unchanged.

The Bank of Japan (BoJ) left its policy rate unchanged at 0.25%. In the statement released by the bank, it was noted that the recovery in the Japanese economy is continuing, and that inflationary pressures have softened due to the decline in import prices but are still expected to persist. Analysts noted that signals from the statement to be made by Bank of Japan (BoJ) Governor Kazuo Ueda during the day could provide more information regarding the bank's future steps.

According to data released in the country today, the annual Consumer Price Index (CPI) for August rose by 3%, and the Core CPI rose by 2.8%, in line with expectations. The dollar/yen parity, which closed at 142.6 yesterday, is at 142.2 in the new day, 0.3 below the previous close.

In addition, there was no change in China's 1-year and 5-year Loan Prime Rates (LPR), which serve as benchmark interest rates. According to the statement from the National Interbank Funding Center, the 1-year loan interest rate was kept steady at 3.35%, and the 5-year loan interest rate at 3.85%.

Analysts, who stated that expectations for a cut in China's 1-year and 5-year loan interest rates had emerged in Chinese markets following the Fed's 50-basis-point rate cut, said that selling pressure formed in equity markets after the loan interest rates were left unchanged.

On the other hand, China's Hong Kong Special Administrative Region cut its benchmark interest rate by the same margin yesterday, following the US Federal Reserve's (Fed) 50-basis-point policy rate cut, due to its currency regime pegged to the US dollar. Near the close, the Nikkei 225 index in Japan gained 1.8%, the Hang Seng index in Hong Kong 1%, and the Kospi index in South Korea 0.9%, while the Shanghai composite index in China lost 0.5%.

In Borsa Istanbul, which followed a buying-weighted trend yesterday, the BIST 100 index completed the day at 9,975.61 points, an increase of 2.06% compared to the previous close. Meanwhile, the CBRT Monetary Policy Committee (MPC) kept the one-week repo auction rate, which is the policy rate, unchanged at 50% yesterday.

In the MPC announcement, it was stated, "While core goods inflation continues to remain low with a limited increase, the improvement in services inflation is expected to occur in the last quarter. In the event that a significant and permanent deterioration in inflation is foreseen, monetary policy tools will be used effectively."

Following these developments, Turkey's 5-year credit default swap (CDS) is currently at 254.2 basis points, the lowest level seen since February 2020. The dollar/TL exchange rate, which closed at 34.0303 with a 0.1 percent decline yesterday, is trading at 34.0820 with a 0.2 percent increase at the opening of the interbank market today.

Analysts stated that today's data releases will include the consumer confidence index and the Foreign Producer Price Index (YD-ÜFE) in Turkey, and the consumer confidence index in the Eurozone. From a technical perspective, they noted that the BIST 100 index has resistance levels at 10,100 and 10,250, with support levels at 9,900 and 9,700 points.

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

10:00 Turkey, September consumer confidence index

10:00 Turkey, August Foreign Producer Price Index (YD-ÜFE)

17:00 Eurozone, September consumer confidence index