All eyes in global markets are on the statements to be made by US Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Economic Policy Symposium today.
As the fight against inflation around the world nears its end, investors are focusing on the road map that the Fed will follow starting in September.
While pricing in the money market indicates that the Fed is expected to cut interest rates by a total of 100 basis points by the end of the year, the signals from Powell’s statements today are expected to increase volatility in the markets.
Yesterday, as Fed officials continued to give their verbal guidance, Kansas City Fed President Jeff Schmid pointed out that inflation needs to be brought to a sustainable 2 percent, adding that the somewhat calming labor market has helped that, but there is still work to be done.
Stating that it would be beneficial to take a closer look at unemployment data, Schmid said that the data would show where we are headed.
Boston Fed President Susan Collins also noted that data should provide more confidence that inflation is returning to 2 percent, and that it would be appropriate to begin cutting interest rates soon.
Collins said that if a different policy stance is adopted, a gradual pace of reductions would be appropriate.
Philadelphia Fed President Patrick Harker also said he is open to cutting interest rates in September as long as data performs as expected.
Harker pointed out that the focus should be on a steady easing process rather than the size of the interest rate cut, and said that he thought a slow and methodical approach was the right path.
With these developments, the US 10-year bond interest rate is currently balanced at 3.85 percent and the dollar index is balanced at 101.3.
The ounce price of gold is traded at $2,492, 0.3 percent above the previous close, and the barrel price of Brent oil is traded at $76.6, parallel to the previous close.
Yesterday, the Dow Jones index fell by 0.43 percent, the S&P 500 index fell by 0.89 percent and the Nasdaq index fell by 1.67 percent. Index futures contracts in the US started the new day with an increase.
While the search for direction was prominent in European stock markets yesterday, data released in the region caused concerns about economic activity to remain strong.
Accordingly, in Germany, the August manufacturing industry Purchasing Managers Index (PMI) was 42.1, while the services sector PMI was 51.4, below expectations.
In the Eurozone, the manufacturing industry PMI came in below expectations at 45.6, while the services sector PMI came in above expectations at 53.3.
Yesterday, the FTSE 100 index in England rose by 0.06 percent and the DAX 40 index in Germany rose by 0.24 percent, while the CAC 40 index in France and the FTSE MIB index in Italy remained flat. Index futures contracts in Europe started the new day with an increase.
In Asian stock markets, investors are seen acting cautiously ahead of Fed Chair Powell’s statements, while indices across the region are moving within a narrow band on the last trading day of the week.
On the other hand, according to the data released in Japan, the Consumer Price Index (CPI) increased by 2.8 percent in July, above expectations, and it is stated that this situation has eased the policy space for the Bank of Japan (BOJ) to increase interest rates.
Near the close, Japan’s Nikkei 225 index rose 0.5 percent, Hong Kong’s Hang Seng index fell 0.5 percent, South Korea’s Kospi index and China’s Shanghai composite index fell 0.1 percent.
Following a buying-heavy trend yesterday, the BIST 100 index in Borsa Istanbul closed the day at 9,921.40 points, up 0.17 percent compared to the previous close.
Dollar/TL closed at 33.9065 with a 0.1 percent increase yesterday, and is being traded at 33.9800 at the opening of the interbank market today.
Analysts stated that today, the financial services confidence index in Turkey and the news flow from the Jackson Hole Economic Policy Symposium abroad will be followed by new home sales in the US, and noted that from a technical perspective, the 9,900 and 9,750 levels in the BIST 100 index are support, while 10,000 points are resistance.
