Global markets are fluctuating after the Fed

In global markets, following the Federal Reserve’s decision to keep interest rates steady and Fed Chair Jerome Powell’s verbal guidance, a mixed trend is observed, with today’s busy data agenda capturing investors’ attention.

Yesterday, the Fed kept its policy rate steady at the highest level in 23 years, between 5.25% and 5.50%. The bank’s statement noted that progress towards the 2% inflation target had not been achieved in recent months.

After the interest rate decision, Fed Chair Jerome Powell signaled during a press conference that interest rates could remain higher than expected for longer periods. Powell indicated concerns over the lack of strong data so far this year, stating, “As I have mentioned before, data on inflation have come in above expectations. It is likely that it will take longer than expected to gain such a high level of confidence.”

Powell emphasized that the focus of policy is how long monetary policy will remain restrictive, stating, “I don’t think the next policy move will likely be a rate hike.”

With these developments, the yield on the U.S. 10-year Treasury bond ended the day at 4.62%, marking an approximately 8 basis point decrease and is currently showing a flat trend.

The dollar index, which closed yesterday at 105.7 after a 0.5% decline, is currently trading just below its previous close.

Gold’s ounce price completed the day at $2,320 with a 1.5% increase following Powell’s remarks that an interest rate hike is unlikely. Currently, it is finding buyers at $2,319, just below the previous close.

As tensions in the Middle East eased, the barrel price of Brent crude oil, which extended its downward trend for a third consecutive trading day, closed the day at $83.4 with a 2.9% decrease and is currently trading at $83.9, up 0.5%.

Meanwhile, earnings season remains intense in the U.S. Following the market close yesterday, U.S. e-commerce giant Amazon reported that its revenue for the first quarter of the year increased by 13% compared to the same period last year, reaching $143.3 billion. The company’s shares gained over 2% in futures markets.

On the other hand, Starbucks, one of the companies facing protest and boycott campaigns due to Israel’s attacks on Gaza, reported a decline in revenue for the January-March period. The coffee chain’s shares lost approximately 16%.

Shares of chip company AMD fell by 9%, while shares of Super Micro Computer, whose revenue fell below expectations, declined by 14%.

Analysts note that Apple’s financial results are expected to be released today during the ongoing earnings season in the U.S., and sector-specific volatility may remain high.

Yesterday, the Nasdaq index fell by 0.33% and the S&P 500 index by 0.34%, while the Dow Jones index recorded a 0.23% increase. Futures contracts for the indexes in the U.S. started the new day with a positive trend.

While there were no trades in European markets yesterday due to the holiday, Purchasing Managers’ Index (PMI) data for the manufacturing industry in Germany and the Eurozone are in focus today.

Analysts suggest that these data could provide clues about the region’s economic activity, with the manufacturing PMI expected to be 42.2 in Germany and 45.6 in the Eurozone in April.

The euro/dollar parity, which completed yesterday at 1.0715 with a 0.5% increase, is currently trading at 1.0720, just above the previous close.

In Asian equity markets, mixed trends are prevalent, with the fluctuating movement of the Japanese yen against the dollar attracting attention.

Analysts report that the dollar/yen pair, which tested the 160.24 level at the beginning of the week, reaching above 160 for the first time since June 1986, completed the day at 154.5, down 2.1% amid potential interventions by the Bank of Japan (BoJ) and the dollar’s depreciation against major currencies yesterday. The pair is currently trading at 155.8, just above the previous close.

At the close, the Nikkei 225 index in Japan and the Kospi index in South Korea fell by 0.1%, while the Hang Seng index in Hong Kong increased by 2.2%. There were no trades in the markets in China due to the holiday.

In domestic markets on Tuesday, the BIST 100 index on the Borsa Istanbul closed the day at 10,045.74, down by 0.37%. Today, attention is turned to manufacturing PMI data.

Following a bullish trend yesterday, the dollar/Turkish lira rate completed the day at 32.4833, just above the previous close, and is currently trading at 32.3490 at the opening of interbank markets.

Analysts note that today’s focus will be on manufacturing PMI in domestic and European markets, as well as weekly jobless claims, trade balance, and factory orders data in the U.S.

The data to be followed in the markets today are as follows:

10:00 Turkey – April manufacturing PMI

10:55 Germany – April manufacturing PMI

11:00 Eurozone – April manufacturing PMI

15:30 U.S. – Weekly jobless claims

15:30 U.S. – March trade balance

17:00 U.S. – March factory orders

source: prepared by Melisa Beğiç

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