In global markets, the weakening of interest rate increase expectations for the US Federal Reserve (Fed) following weak employment data in the USA supported risk appetite, while the concern that rising energy costs due to tensions in the Middle East could increase inflationary pressures led investors to be cautious.
According to data announced last week, non-agricultural employment in the USA decreased by 23 thousand people in July, while market expectations were for an increase of 85 thousand people. Although private sector employment increased by 44 thousand people in the same period, it remained below estimates.
Following the data, expectations for an interest rate increase by the Fed by the end of the year weakened in the money markets. While the probability that the bank will not change its policy stance at the September meeting has increased to 53 percent, the possibility of a possible interest rate increase is priced at 71 percent for October and 83 percent for December.
Analysts stated that it should not be ignored that the decline in employment, especially in the service sector, after the World Cup organization, which started in June, ended in July, could be one of the reasons for the decrease in non-agricultural employment.
On the geopolitical side, the US administration is waiting for economic pressure to yield results by putting a new military operation against Iran on the backburner for now.
In addition to the delay in the agreement that will ensure peace in the Middle East and the lack of positive developments in the negotiations yet, Iran’s insistence on demands such as the withdrawal of US troops from the region in order to reopen the Strait of Hormuz, the lifting of the naval blockade and the payment of economic payments, keeps the geopolitical risks alive in the regional markets.
– Data agenda will be intense this week in Europe
Important data in the Eurozone will be followed closely this week.
Investors will focus on inflation data in Germany on Wednesday, growth and industrial production in the UK and industrial production in the Eurozone on Thursday, and growth data in the Eurozone on Friday. Data indicating that economic activity in the region was accelerating supported the markets last week.
With these developments, the Stoxx Europe 600 indicator index is at 660.7 points, with an increase of 0.7 percent, as of 10.40 in the European markets.
In England, the FTSE 100 index is at 10,887 points, with a 0.1 percent decrease compared to the previous closing, in Italy, the FTSE MIB 30 index is at 53,691 points, with a 0.05 percent decrease in value, and in Spain, the IBEX 35 index is at 20,131 points, with a 0.27 percent decrease.
The DAX 40 index in Germany is trading horizontally at 26,347 points, and the CAC 40 index in France is trading at 8,714 points, parallel to the previous close.
Analysts stated that the Sentix investor confidence index data in the Eurozone will be followed for the rest of the day.
