Global markets remain mixed due to Middle East tensions

Global markets are following a mixed course due to the ongoing tension in the Middle East, despite increased expectations for a soft landing following the data announced in the USA.

While inflation concerns around the world are giving way to fear of recession, employment data to be announced in the USA continues to remain in the focus of investors.

According to data released yesterday, private sector employment in the USA increased by 143 thousand people in September, above market expectations. Annual wage increase decreased from 4.8 percent to 4.7 percent in September.

Analysts noted that data on private sector employment calmed concerns about the rapid cooling in the labor market and stated that non-agricultural employment data to be announced on Friday is expected for more information on the state of the labor market.

While the statements from the US Federal Reserve (Fed) officials were also followed, Richmond Fed President Thomas Barkin stated that the Bank cut the interest rate by half a basis point last month because the policy rate was not compatible with the current state of the economy, but this should not mean that the fight against inflation is over. “It remains difficult to say that the fight against inflation has yet been won,” Barkin said.

On the corporate side, Nike's shares lost 6.8 percent after it withdrew its revenue target before the top executive change.

Shares of US electric car manufacturer Tesla also fell 3.5 percent after the company's car deliveries fell below expectations in the third quarter of the year.

On the other hand, while the strike initiated by workers in ports in the east and south of the USA due to disagreements with employers regarding wage increases and automation completed its second day, it was stated in the news in the US press that no negotiations were planned between the two parties. Analysts stated that there is concern that the strike at the ports may cause disruptions in the supply chain and price increases.

While the expectation that the Fed will make a 75 basis point reduction by the end of the year remains strong in the pricing in money markets, it is predicted that there will be a 25 basis point interest rate reduction in November with a 66 percent probability.

BONDS, DOLLAR, GOLD, OIL, STOCK EXCHANGE

With these developments, the US 10-year bond interest is currently at 3.8 percent, while the dollar index started the day at 101.7.

While the ounce price of gold lost 0.2 percent of its value yesterday, it is currently trading at $2,656, 0.1 percent below the previous closing.

After the barrel price of Brent oil gained 0.4 percent yesterday due to the ongoing tension in the Middle East, it is currently at 74.6 dollars, 0.1 percent above the previous close.

Yesterday, the Dow Jones index rose 0.09 percent, the S&P 500 index rose 0.01 percent and the Nasdaq index rose 0.08 percent. Index futures contracts in the USA started the day with a negative trend.

RECESSION CONCERNS CONTINUES IN EUROPE

While European stock markets showed a mixed trend yesterday due to the impact of geopolitical risks, recession concerns remain in the region.

While it is predicted that the European Central Bank (ECB) will cut interest rates by a total of 50 basis points by the end of the year, the signals of stagnation in economic activity continue to strengthen, making pricing difficult.

While verbal guidance from ECB officials continues, ECB Governing Board member Isabel Schnabel stated in her statement yesterday that they cannot ignore the headwinds in growth and said, “Although the peak impact of monetary tightening is probably behind us and real incomes rise as inflation falls and wages rise, growth continues to remain shallow.” .” he said.

On the other hand, the rise in tension in the Middle East had a positive impact on the shares of some defense and energy companies in the European stock markets, while the shares of arms manufacturers, Rheinmetall, BAE Systems and Thales gained more than 2 percent in value.

Yesterday, while the DAX 40 index in Germany decreased by 0.25 percent and the FTSE MIB index in Italy decreased by 0.28 percent, the CAC 40 index in France increased by 0.05 percent and the FTSE 100 index in the UK increased by 0.17 percent. Index futures contracts in Europe started the day on a mixed note.

MIXED NAVIGATION IN ASIA

While a mixed trend prevails in Asian markets on the new trading day, there are no transactions in South Korea and China due to holidays.

Yesterday, Japan's new Prime Minister, Ishiba Shigeru, said after his meeting with Bank of Japan (BoJ) Governor Kazuo Ueda that Japan was not ready for higher borrowing costs at the moment, causing a depreciation in the yen.

While the dollar/yen parity completed the day yesterday at 146.47 with a 2 percent increase, it is currently at 146.80 with a 0.2 percent increase.

Analysts stated that uncertainty regarding the BOJ's monetary tightening process increased after the said statement, and noted that the depreciation in the Japanese yen fed the stock markets in the country.

According to the data announced today, Japan's service sector Purchasing Managers Index (PMI) for September was below expectations at 53.1, while the composite PMI was 52.0.

In Hong Kong, the ongoing upward trend led by Chinese stocks gave way to a decline today.

Near the close, the Nikkei 225 index in Japan increased by 2.1 percent, while the Hang Seng index in Hong Kong decreased by 3.2 percent.

DOMESTIC, EYES ON INFLATION DATA

While the BIST 100 index at Borsa Istanbul, which followed a sales-oriented trend yesterday, completed the day at 9,012.87 points, with a decrease of 3.62 percent compared to the previous closing, today all eyes in the country turned to September inflation data.

Economists participating in the AA Finance Inflation Expectations Survey estimate that the Consumer Price Index (CPI) increased by 2.09 percent in September.

According to the average inflation expectations of economists for September, annual inflation, which was 51.97 percent in the previous month, is expected to decrease to 48.11 percent.

On the other hand, economists' inflation expectation for the end of 2024 was 43.23 percent in September.

While Dollar/TL closed at 34.2182 with a 0.1 percent increase yesterday, it is traded at 34.2300 at the opening of the interbank market today, just above the previous closing.

Analysts stated that an intense data agenda will be followed today, including domestic inflation, weekly money and bank statistics, global service sector and composite PMI data abroad, Producer Price Index in the Euro Zone, durable goods orders and factory orders in the USA, and BIST He noted that in the 100 index, 9,000 and 8,700 points are support, and 9,200 and 9,300 levels are resistance.

The data to follow in the markets today are as follows:

10.00 Türkiye, September CPI

10.00 Türkiye, September Domestic Producer Price Index (D-PPI)

10.55 Germany, September service sector/composite PMI

11.00 Eurozone, services sector/composite PMI for September

11.30 UK, September services sector/composite PMI

12.00 Eurozone, August Producer Price Index (PPI)

14.30 Türkiye, weekly money and bank statistics

15.30 USA, weekly unemployment claims

16.45 USA, September service sector/composite PMI

17.00 USA, September ISM service sector PMI

17.00 USA, August durable goods orders

17.00 USA, August factory orders

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