Statements from the US-Iran line continue to impact price behavior. Increasing tensions in the Middle East pose challenges to the upward trend in global markets.
The ongoing upward pressure on energy prices continues to limit risk appetite in the markets. On the other hand, maintaining the diplomatic channel is the most important factor that can keep the selling pressure under control for now.
In his statement yesterday, US President Donald Trump called Iran's latest proposal “stupid” and said: “I can say that the ceasefire is currently at its weakest moment. It is on life support.” he said.
Trump also announced that he would temporarily eliminate the federal gasoline tax in response to the rise in oil prices caused by the war in Iran. While markets are focused on US inflation data released today, investors appear to be cautious about the data.
Following last week's strong non-farm payrolls data, today's inflation data will also impact expectations for Federal Reserve (Fed) policy.
The extent to which energy price pressure from the Middle East is reflected in the inflation outlook is crucial to the Bank's interest rate expectations.
Analysts said risks posed by the Middle East are not yet having a significant impact on the U.S. economy and said if those risks persist, those impacts could become more noticeable.
Trump's visit to China this week is also being followed closely by the markets. Trump is expected to meet with Chinese President Xi Jinping on Thursday.
On the other hand, the US Treasury Department placed 12 individuals and entities on the sanctions list, citing their role in the Iranian Revolutionary Guard's oil sales and shipments to China.
Turning to macroeconomic data, US used home sales rose 0.2 percent in April but fell short of market expectations. After a decline in optimism that a lasting peace between the parties will be achieved, the barrel price of Brent oil rose by 0.2 percent to $ 102.8.
Amid forecasts that inflationary pressures will increase due to the rise in oil prices, the US 10-year bond rate rose 5 basis points to 4.41 percent.
Given the ongoing geopolitical risks, the dollar index is at 98.1, up 0.1 percent.
An ounce of gold is trading at $4,717, down 0.4 percent, due to rising oil prices and a strengthening dollar after geopolitical tensions rose again.
Record values were tested on the New York stock market
A positive trend was observed on the New York Stock Exchange yesterday due to the sharp rise of chip companies. Shares of Micron Technology rose 6.5 percent, shares of Qualcomm rose 8.4 percent and shares of Nvidia gained nearly 2 percent.
With these developments, the Dow Jones index rose by 0.19 percent, the S&P 500 index by 0.19 percent and the Nasdaq index by 0.10 percent.
The S&P 500 index reached a record level of 7,428.97 points and the Nasdaq index reached 26,359.31 points. Index futures contracts in the US started the day lower.
With the exception of France, European stock markets rose
Cautious optimism prevailed in European stock markets yesterday, driven by the rise in mining stocks, supported by increases in silver and copper prices. While an ounce of silver tested its highest level in two months at $87 yesterday, the copper pound neared its record level today at $6.45.
While the ongoing problems with global copper supplies are causing copper prices to rise despite tensions in the Middle East, silver is also in high demand in the industrial sector.
As the impact of escalating geopolitical tensions in the Middle East on the European economy is clearly being felt, the European Central Bank (ECB) is expected to raise interest rates twice this year as the war between the US, Israel and Iran increases inflationary pressures.
When assessing the economic damage caused by the conflict in the Middle East, the Bank has so far pursued a wait-and-see policy. ECB board member Isabel Schnabel said last week that monetary policy should be tightened as the energy shock widens.
However, the Economic Research Institute (Ifo), one of the most important German economic and think tanks, stated that 8.1 percent of the companies participating in the April survey of the German economy were at risk in the current economic situation.
According to this, around one in twelve companies in Germany fears that they will not be able to survive due to a lack of demand due to a lack of orders and rising operating and energy costs.
The key factor of the June meeting will be developments regarding the Strait of Hormuz.
Political developments in England are also being followed closely. British Prime Minister Keir Starmer said he was not thinking of resigning after the country's heavy defeat in local elections and that constant changes would plunge the country into chaos.
Starmer said a “big leap” needed to be made immediately in trade, economic and security relations with the European Union.
At a time when political activity in the UK was at the forefront, there was selling pressure in the country's bond market as the UK 10-year bond rate rose 8 basis points to 4.99 percent.
On the other hand, the European Union (EU) wants to specifically target the oil-transporting shadow fleet, banks and companies in its new sanctions package against Russia.
With these developments, the DAX 40 index in Germany rose by 0.07 percent, the FTSE MIB 30 index in Italy by 0.76 percent and the FTSE 100 index in England by 0.36 percent, while the CAC 40 index in France lost 0.69 percent. Index futures contracts in Europe started the day lower.
Asian stock markets remain mixed
Asian stock markets are mixed as there is no sign of tensions between the US and Iran easing.
The People's Bank of China (PBOC) warned of the risk of imported inflation due to high oil and commodity prices triggered by conflicts in the Middle East. The bank said the impact of imported inflation on the economy should be monitored.
On the other hand, the minutes of the April meeting of the Bank of Japan (BoJ) were released. The minutes, where hawkish views prevail, said: “The situation in the Middle East remains uncertain and current conditions do not suggest that the key interest rate should be increased urgently.” Statements were recorded.
In South Korea, selling pressure increased on the South Korean stock market after it was announced that dividends would be distributed by taxing income from artificial intelligence profits.
News of US President Donald Trump's visit to China is also expected to be crucial to the direction of Asian markets this week.
With these developments, South Korea's Kospi index fell 3 percent shortly before the close, China's Shanghai Composite Index fell 0.4 percent, Hong Kong's Hang Seng index rose 0.3 percent and Japan's Nikkei 225 index rose 0.6 percent.
The stock market ended the day with records
The BIST 100 index on Borsa Istanbul, which followed a buying-oriented trend yesterday, closed the day at 15,133.54 points, gaining 0.47 percent in value and reaching its highest closing price ever. Furthermore, the index broke its peak at 15,204.92 points.
The June futures contract based on the BIST 30 index in the Borsa Istanbul Futures and Options Market (VIOP) was traded at 17,953.00 points in the last evening session, up 0.14 percent compared to the normal session close.
While Dollar/TL closed at 44.8580 on Friday, up 0.1 percent, today it is trading at 45.3920 at the opening of the interbank market, up 0.1 percent from the previous close.
Analysts said that the data agenda in the country was quiet today and that the CPI and ZEW indices in Germany as well as the CPI data in the US were being followed abroad. Technically, 15,200 and 15,300 points in the BIST 100 index are considered resistance and 15,000 and 14,900 points are considered support.
The data to note in the markets today are as follows:
12:00 p.m. Germany, May ZEW economic confidence index, 3:30 p.m. USA, April Consumer Price Index, 9:00 p.m. USA, April Federal budget balance.
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