In global markets, after the data released in the US pointed to the vitality in economic activity, the expectations for the first interest rate cut by the US Federal Reserve (Fed) were postponed to November, increasing the perception of risk, while the intense data agenda was the focus of investors today.
In global markets, after the data released in the US pointed to the vitality in economic activity, the expectations for the first interest rate cut by the US Federal Reserve (Fed) were postponed to November, increasing the perception of risk, while the intense data agenda was the focus of investors today.
While the macroeconomic data released in the US continued to give strong signals, these data supported the Fed officials’ verbal guidance that they want to see more evidence that inflation is cooling and that there should be no rush to cut interest rates.
According to the data released in the country yesterday, the leading manufacturing, service sector and composite Purchasing Managers’ Index (PMI) exceeded expectations, indicating that economic activity in the country accelerated.
In the US, the manufacturing industry PMI increased by 0.9 points monthly to 50.9 in May, the service sector PMI increased by 3.5 points to 54.8 and the composite PMI increased by 3.1 points to 54.4, exceeding forecasts.
The number of first-time unemployment benefit applicants in the country remained below expectations with 215 thousand in the week ending May 18, while new home sales fell 4.7 percent month-on-month to 634 thousand in April, below market forecasts.
Analysts stated that the positive data flow on economic vitality increased the likelihood of the Fed keeping the policy rate higher for a longer period of time, and that the decline in jobless claims showed that the labor market continued to remain strong even though employment growth in the US slowed down.
Following these developments, the probability of the Fed’s first interest rate cut in September fell to 48 percent in the pricing in the money markets. The probability of the bank starting to cut interest rates is priced at 65 percent in November and 85 percent in December.
In addition to macroeconomic data, Fed officials’ verbal guidance continues to be in the focus of investors.
Atlanta Fed President Raphael Bostic stated that they may need to be a little more patient and confident about the path of inflation to the 2 percent target before changing the policy rate, “It would not surprise me if it takes longer to reach 2 percent inflation in the US than elsewhere.”
With these developments, the US 10-year treasury bond yield increased by 5 basis points to 4.48 percent, while hovering at 4.47 percent today.
The dollar index, which has carried its upward trend to the fifth consecutive trading day, is currently at 105.1, just above its previous close.
The ounce price of gold, which lost 2.1 percent yesterday and completed the day at $ 2,329, is currently trading at $ 2,334, up 0.2 percent compared to its previous close.
The barrel price of Brent oil continues its downward series on the fifth trading day and is traded at $ 81.1.
On the New York stock exchange yesterday, the Nasdaq index decreased by 0.39 percent, the S&P 500 index by 0.74 percent and the Dow Jones index by 1.53 percent. Index futures contracts in the US started the new day with a negative course.
While European stock markets followed a mixed course yesterday, retail sales in the UK today helped ease inflation concerns.
Retail sales in the UK fell by 2.3 percent on a monthly basis and 3 percent on an annual basis, well below forecasts.
In Germany, 1st quarter Gross Domestic Product (GDP) increased by 0.2 percent on a quarterly basis, while it decreased by 0.2 percent on an annual basis.
On the other hand, the euro / dollar parity, which carried its downward trend to the fifth consecutive trading day, is trading at 1.0810 just below its previous close today.
Yesterday, the FTSE 100 index in the UK declined by 0.37 percent, while the DAX 40 index in Germany increased by 0.06 percent, the CAC 40 index in France by 0.13 percent and the MIB 30 index in Italy by 0.02 percent. Index futures contracts in Europe started the new day with a negative course.
While a sales-weighted course prevailed in Asian equity markets, uncertainties regarding the Fed’s future policies are seen to be effective in these pricing.
Yesterday, the Central Bank of the Republic of Turkey (CBRT) left the policy rate unchanged at 50 percent, while the announcement made by the bank said, “The underlying trend of monthly inflation weakened slightly in April. Recent indicators pointed to a slowdown in domestic demand compared to the first quarter.”
In the announcement announced by the CBRT after the interest rate decision, it was stated that the required reserve ratios applied to TL deposits and KKM accounts were increased in order to maintain macro financial stability, support the monetary transmission mechanism and sterilization of excess liquidity.
Dollar / TL is traded at 32.2200 at the opening of the interbank market today after completing the day at 32.1829, just below its previous close, following a horizontal course yesterday.
Analysts stated that today, the financial services confidence index in Turkey, durable goods orders in the US and University of Michigan consumer confidence index data will be followed abroad, and noted that technically, 10,600 and 10,500 levels are in support, 10,800 and 11,000 points are in resistance position in the BIST 100 index.
