In global markets, the strengthening forecasts that the far-right may have difficulty in winning an outright majority in the French elections supported the risk appetite, while the verbal guidance of major central bank governors became the focus of investors.
While inflation concerns continued to have an impact on pricing across the globe, uncertainties regarding the US Federal Reserve’s (Fed) future actions led investors to act cautiously.
Although money markets are pricing in two rate cuts by the Fed this year, both the cautious messages of Fed officials and the signals received from the US macroeconomic data cause question marks about the bank’s future policies to remain on the agenda.
While the data in the US employment report to be released this week is expected to reveal the latest situation regarding the tightness of the labor market, the strong employment in the country is considered as a factor that makes it difficult for the Fed to fight inflation. The Fed wants unemployment to rise slightly from historically low levels and the tight labor market to lose its supportive stance on inflation.
For these reasons, the data in the employment report to be announced this week, especially non-farm payrolls, is expected to be influential on the direction of the markets, while the verbal guidance from Fed Chairman Jerome Powell is also in the focus of investors.
While the US 10-year bond yield increased by about 10 basis points to 4.39 percent on Friday, it is at 4.40 percent on the first trading day of the week.
The dollar index, on the other hand, decreased by 0.2 percent to 105.6, carrying the downward trend to the third consecutive trading day, while the ounce price of gold is 0.2 percent below its previous close at $ 2,323.
The barrel price of Brent oil, which completed the day at 84.9 dollars with a 0.4 percent decrease on the last trading day of last week, is currently trading at 85.2 dollars, up 0.4 percent compared to its previous close.
On the New York stock exchange on Friday, the Nasdaq index decreased by 0.71 percent, the S&P 500 index by 0.41 percent and the Dow Jones index by 0.12 percent. Index futures contracts in the US started the new week with a positive course.
While a negative course prevailed in European stock markets on Friday, except for Germany, expectations that the far right may have to cooperate with center or left-wing parties in the second round in order to achieve an absolute majority, despite the fact that the far right increased its votes in the first round of the early elections held over the weekend in France.
Analysts stated that this situation was effective in the positive start of the week for index futures contracts in Europe, and said that the statements to be made by European Central Bank (ECB) President Christine Lagarde during the week may increase volatility in the markets.
Stating that the Consumer Price Index (CPI) in Germany today and the manufacturing industry Purchasing Managers’ Index (PMI) data to be announced across the region, as well as the inflation data to be announced in the Eurozone during the week are in the focus of investors, analysts reported that the possibility of the bank going for two interest rate cuts this year continues to be priced in the pricing in the money markets.
On the other hand, the euro / dollar parity increased by 0.4 percent to 1.0760 today, carrying the upward trend to the third trading day in a row. The pair tested the highest level in nearly two weeks, rising to 1.0762 during the day.
On Friday, the FTSE 100 index in the UK fell 0.19 percent, the CAC 40 index in France by 0.68 percent and the MIB 30 index in Italy by 0.10 percent, while the DAX 40 index in Germany increased by 0.14 percent. Index futures contracts in Europe started the new week with a positive course.
While a positive course was also prominent in Asian equity markets, the data released in China pointed to economic vitality.
According to the data released today, Caixin manufacturing PMI in China exceeded expectations with 51.8 in June, the highest level in nearly three years. In Japan, manufacturing PMI remained below the forecasts with 50 in the same period.
On the other hand, while the Japanese yen continues to hover at its lowest level against the dollar since 1986, the possible steps to be taken by the Bank of Japan (BoJ) are closely followed by investors.
Analysts reminded that the possibility of the BoJ’s two interest rate cuts this year was priced in the money markets, and reported that the bank was priced to make a 10 basis point increase with a 62 percent probability at the July meeting.
Near the close, the Nikkei 225 index i
n Japan rose 0.1 percent, the Kospi index in South Korea rose 0.1 percent and the Shanghai composite index in China rose 0.4 percent. There were no transactions in Hong Kong due to the holiday.
In Borsa Istanbul, which followed a fluctuating course on Friday in Turkey, the BIST 100 index completed the day at 10,647.91 points, down 0.31 percent compared to the previous close.
Dollar / TL is traded at 32.7410 at the opening of the interbank market today after completing the day at 32.7179, 0.4 percent below the previous close, following a sellers’ course on the last trading day of last week.
Analysts stated that manufacturing industry PMI data in Turkey and around the world as well as inflation data in Germany will be followed today, and noted that technically, 10,600 and 10,500 levels are in support, 10,700 and 10,800 points are in resistance position in the BIST 100 index.
