Global Markets Exhibit Mixed Trends Ahead of US Growth Data

As uncertainties persist regarding the timing of the US Federal Reserve’s (Fed) interest rate cut, global markets are cautiously navigating ahead of the announcement of the United States’ Gross Domestic Product (GDP) growth data today.

The financial results of major US technology companies, which dominated the agenda last week, have now given way to macroeconomic data in the country. Market participants are anticipating increased volatility with the release of the Gross Domestic Product (GDP) data today and inflation and consumer spending data tomorrow.

Analysts suggest that these macroeconomic indicators could provide clues about the Fed’s future actions, emphasizing that the guidance from central bank officials also remains a focal point for investors.

Fed Board Member Michelle Bowman, in a statement yesterday, expressed that there is no rush to lower interest rates when considering the upward risks that could halt progress in reducing inflation and lead to renewed upward pressure on prices.

Ahead of the growth data, expectations are high that the Fed will keep policy rates steady in March, with a 19% probability of the first rate cut in May and a 61% probability in June.

Meanwhile, attention has turned to the news flow from the G20 Finance Ministers and Central Bank Governors Meeting held in Sao Paulo, Brazil.

US Treasury Secretary Janet Yellen, in a pre-meeting statement, noted that global economic growth was resilient and stronger than expected last year. She also mentioned a decline in inflation, with an anticipated continued decrease in about 80% of economies this year.

According to yesterday’s macroeconomic data in the US, durable goods orders recorded a higher-than-expected monthly decline of 6.1% in January, marking the largest drop since April 2020. The Conference Board (CB) Consumer Confidence Index also fell for the first time in four months, decreasing by 4.2 points to 106.7 in February. On the positive side, the S&P Case-Shiller National Home Price Index in the US increased by 0.2% in December compared to the previous month.

Following these developments, the US 10-year Treasury yield stands at 4.30%, and the dollar index is trading at 103.9, up 0.1%.

Gold, extending its downward trend for the third consecutive trading day, is currently finding buyers just below $2,030, slightly below the previous closing.

Despite geopolitical risks in the Red Sea and indications that OPEC+ will extend production cuts, oil prices are slightly pressured by the increase in US oil inventories. Brent crude, which completed the day yesterday with a 0.9% increase at $82.4, is currently trading at $82.3, 0.1% below the previous closing.

In the cryptocurrency markets, Bitcoin is at its highest level since December 2021, reaching $57,250.

On the corporate front, video game company Sony Interactive Entertainment announced plans to lay off 900 employees, representing 8% of its global workforce.

In the New York stock market, the Nasdaq index rose by 0.37%, the S&P 500 index increased by 0.17%, while the Dow Jones index recorded a 0.25% decrease. Futures contracts in the US indices started the new day with mixed trends.

In European stock markets, positive trends were observed everywhere except in the UK. Eyes are now on consumer confidence index data in the Eurozone today.

Analysts note that expectations for interest rate cuts by the European Central Bank (ECB) and the Bank of England (BoE) in June persist, and Friday’s inflation data in the region could provide signals about the ECB’s future steps.

Meanwhile, the euro/dollar exchange rate is currently at 1.0830, down 0.1%

Yesterday, the FTSE 100 index in the UK fell by 0.02%, while in France, the CAC 40 index increased by 0.23%, the MIB 30 index in Italy rose by 0.46%, and the DAX 40 index in Germany gained 0.76%. Futures contracts in European indices started the new day with mixed trends.

Mixed trends dominated Asian equity markets

As cautious sentiment from US equity markets spilled over into Asia, the Reserve Bank of New Zealand kept its interest rate at 5.50%, maintaining the highest level in 15 years.

In China, the government is expected to continue taking steps to stimulate economic activity, and news flow on the subject continues to dominate the regional agenda.

The dollar/yen exchange rate, which closed yesterday with a 0.1% decrease at 105.5, is currently at 150.6, 0.1% above the previous closing.

Closing near the end, the Nikkei 225 index in Japan increased by 0.1%, the Kospi index in South Korea rose by 0.8%, the Shanghai Composite index in China increased by 0.1%, and the Hang Seng index in Hong Kong decreased by 0.2%.

In the domestic market, the BIST 100 index at Borsa Istanbul, which followed a selling trend yesterday, closed the day with a 1.66% loss at 9,179.48 points.

The dollar/lira, after following an upward trend yesterday and closing at 31.1426, is currently trading at 31.1630 in the interbank market.

Moreover, news flow on the meetings to be held by Minister of Treasury and Finance Mehmet Şimşek and Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan during the G20 Finance Ministers and Central Bank Governors Meeting remains in focus.

Analysts note that economic confidence index and foreign trade statistics will be followed domestically today, while in the foreign markets, consumer confidence index data in the Eurozone and GDP data in the US will be closely monitored. From a technical standpoint, resistance levels for the BIST 100 index are seen at 9,200 and 9,300, while support levels are at 9,100 and 9,000.

source: prepared by Melisa Beğiç

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