In global markets, a mixed trend is evident on the last trading day of the week, as risk perception has decreased due to increasing expectations of a “soft landing” following the Producer Price Index (PPI) data announced yesterday in the US.
Expectations that the US Federal Reserve (Fed) could cut interest rates by 50 basis points in September, following the weakening employment market and economic growth data, continued to weaken following the inflation data released this week.
According to data released yesterday, PPI in the US rose by 0.2 percent on a monthly basis in August, above expectations, and by 1.7 percent on an annual basis, in line with forecasts.
Core PPI, which excludes volatile food and energy prices, increased by 0.3 percent monthly and 2.4 percent annually in August.
Analysts said that today’s PPI data confirms that the steps the Fed will take in the easing process will be “softer.”
The number of people applying for unemployment benefits for the first time in the US increased by 2,000 in the week ending September 7, reaching 230,000, slightly above market expectations.
Analysts said a slight increase in jobless claims last week suggested layoffs were still low despite the slowdown in the labor market.
International Monetary Fund (IMF) Spokesperson Julie Kozack stated that they think it would be appropriate for the Fed to start cutting interest rates next week, pointing out that upward risks to inflation in the US have diminished.
While it is prominent in money markets that the Fed will cut interest rates by 25 basis points this month, it is almost certain that the bank will cut interest rates by 100 basis points by the end of the year.
On the other hand, the US Treasury Department has published its proposal that companies with annual profits exceeding $1 billion will pay a corporate tax of at least 15 percent. It is estimated that the minimum tax will generate $20 billion in revenue in 2025 and more than $250 billion in the next 10 years.
With these developments, the US 10-year bond interest rate is currently balanced at 3.65 percent and the dollar index is balanced at 101.1.
The price of a barrel of Brent oil rose by 2.2 percent yesterday, and is at 72 with a 0.2 percent increase in value on the new day.
The ounce price of gold, which had a record closing of $2,558 yesterday, is being traded at $2,569 on the new day, 0.5 percent above the previous close.
Yesterday, the Dow Jones index rose by 0.58 percent, the S&P 500 index rose by 0.75 percent and the Nasdaq index rose by 1 percent. Index futures contracts in the US also started the day on a positive note.
European stock markets were dominated by buyers yesterday after the European Central Bank (ECB) cut three key policy interest rates.
According to data released yesterday in the region, the ECB reduced the deposit rate by 25 basis points, the main refinancing rate and the marginal borrowing rate by 60 basis points each. Thus, the ECB made its second interest rate cut of the year in line with market expectations.
The bank also lowered its economic growth forecast for this year from 0.9 percent to 0.8 percent, predicting that the contribution of domestic demand will weaken.
Speaking at a press conference following the decision, ECB President Christine Lagarde said that economic growth in the Eurozone faced some challenges and added, “The diminishing impact of restrictive monetary policy should support consumption and investment.”
Lagarde said the data gave them assurance that they were on track to meet their inflation targets, adding, “Our confidence in the robustness and durability of our projections has increased.”
Yesterday, the DAX 40 index in Germany rose by 1.03 percent, the CAC 40 index in France rose by 0.52 percent, the FTSE 100 index in England rose by 0.57 percent and the FTSE MIB index in Italy rose by 0.84 percent. Index futures contracts in Europe also started the new day on a positive note.
While a mixed trend prevailed on the last trading day of the week in Asia, the appreciation of local currencies in the region, especially the Japanese yen, is weakening the upward trend in stock markets.
According to data released today in the region, industrial production in Japan increased by 3.1 percent monthly and 2.9 percent annually in July, while the capacity utilization rate in July increased by 2.5 percent.
The dollar/yen parity closed yesterday with a 0.4 percent loss of value at 141.8, following a downward trend. Testing the 140.65 level on the new trading day, the parity is currently trading at 141.1, approximately 0.5 below the previous close, after seeing its lowest level since December 28, 2023.
Near the close, Japan’s Nikkei 225 index fell 0.7 percent, South Korea’s Kospi index fell 0.1 percent, Hong Kong’s Hang Seng index rose 0.9 percent and China’s Shanghai composite index rose 0.1 percent.
Following a fluctuating course yesterday, the BIST 100 index in Borsa Istanbul closed the day at 9,521.04 points, up 1.08 percent compared to the previous close.
Dollar/TL, which lost 0.2 percent yesterday and closed at 33.9136, is trading at 33.9730 today, up 0.2 percent at the opening of the interbank market.
Analysts stated that the Central Bank of the Republic of Turkey (TCMB) Market Participants Survey will be followed domestically today, and the industrial production in the Eurozone and the University of Michigan consumer confidence index in the US will be followed abroad, and noted that from a technical perspective, the 9,600 and 9,750 points in the BIST 100 index are resistance levels, while the 9,450 and 9,400 points are support levels.
