As signals from data from major economies mean that the inflation and recession dilemma is once again reflected in pricing, US employment data released this week is likely to provide further information about the US economy.
Concerns remain that re-elected US President Donald Trump's protectionist trade policies could lead to a rise in inflation. The main problem in the Fed's roadmap stands out as the uncertainties surrounding the outcomes of this trade policy.
While the Fed is forecast to make only two interest rate cuts during the year, clues about the bank's future policy will be sought in the minutes of the FOMC meeting, which will be released on Wednesday.
While Fed officials' statements are also being acted upon, Richmond Fed President Tom Barkin said on Friday that the country's economy is in “good shape” and that they can be patient in their monetary policy approach.
Despite uncertainty over the impact of policies potentially pursued by the Trump administration, Barkin said the outlook for the U.S. economy in 2025 is positive, explaining that the upside risk to growth is greater than the downside risk.
Barkin pointed out the variables that could affect the Fed's interest rate moves and said it's best to take some time and get more information about the future.
Given these developments, it is certain that the Fed will hold interest rates steady in the first monetary policy decision of the year, to be announced on January 29, while money markets price in the first rate cut of the year in May comes to the fore .
On the corporate side, shares of US Steel rose 6.5 percent after US President Joe Biden announced that he had taken action to end the sale of US steel producer US Steel to Japan's largest steel producer Nippon Steel for national reasons to prevent safety.
U.S. automakers Ford and General Motors reported their best annual U.S. sales since 2019. After the sales figures were announced on Friday, shares of Ford rose more than 2 percent and shares of General Motors rose almost 1 percent.
With these developments, the interest rate on 10-year US bonds stabilized at 4.62 percent, while the price of gold per ounce started the new week with a decline of 0.2 percent at $2,000,633.
Although the dollar index started the new week with a 0.1 percent decline at 108.9, it remains near its highest levels since November 2022.
Due to uncertainty in the manufacturing industry in China, the barrel price of Brent oil is trading at $76, down 0.6 percent.
On Friday, the S&P 500 index on the New York Stock Exchange rose 1.26 percent, the Nasdaq index rose 1.77 percent and the Dow Jones index rose 0.80 percent. The index futures contracts in the USA started the new week with a mixed performance.
While a selling trend emerged on European stock markets on Friday, all eyes were on the inflation data to be announced on the first trading day of the week in Germany.
While recession concerns remain among the top agenda items for economies across the region, December inflation data to be announced in Germany, Europe's largest economy, will be closely watched.
On the other hand, judging from price formation in the money markets, it is considered certain that the European Central Bank (ECB) will cut interest rates by 25 basis points in the first monetary policy decision of the year, which will be announced on January 30.
On the corporate side, shares of the company lost 3.5 percent of their value on Friday after Stellantis said auto production fell about 45 percent last year.
On Friday, the FTSE 100 index in England fell by 0.44 percent, the CAC 40 index in France fell by 1.51 percent, the DAX 40 index in Germany fell by 0.59 percent and the FTSE MIB 30 index in Italy by 0.72 percent. Index futures contracts in Europe started the new week with a mixed performance.
While there is a negative trend in Asian stock markets, with the exception of South Korea, the movements in 10-year bond rates in Japan and China are notable.
While China's 10-year bond interest rate remains stuck at 1.6 percent, economic uncertainties in the country are keeping demand for bonds high.
Analysts said activity in the Chinese economy has not reached desired levels and weak domestic demand remains, saying the risks that could arise in China, one of the world's largest economies, could have an impact on the economy World economy.
On the other hand, as ongoing inflation concerns in Japan intensify, Japanese 10-year bond interest rates are close to their highest in 14 years at 1.12 percent, and signals emerging from data released in the country point to one Inflation is gaining strength, which is the main reason for the selling pressure on bonds.
In addition, Bank of Japan (BoJ) Governor Kazuo Ueda emphasized in his statement today that the timing of the BoJ's monetary policy tightening depends on economic development, saying: “The timing of adjusting the level of monetary policy support will be depend on the future.” Economic, financial and price developments We have to pay attention to various risks. he said.
Analysts said uncertainty over the timing and extent of steps to be taken by the BoJ in the coming period meant risk perceptions in the country remained high and said monetary policy news flows would be closely monitored.
According to data announced in the region today, Japan's December services PMI remained strong at 50.9, while China's Caixin services PMI for December continued to increase, although not at 52.2 met expectations.
With these developments, the Nikkei 225 index lost 1.6 percent shortly before the close, the Shanghai Composite Index in China lost 0.3 percent, the Hang Seng index in Hong Kong lost 0.5 percent and the Kospi index in South Korea turned over 1.9 percent.
Borsa Istanbul's BIST 100 index, which followed a domestic buying trend on Friday, ended the day at 10,075.17 points, up 1.14 percent.
While Dollar/TL closed at 35.3560 on Friday, up 0.1 percent, it is trading at 35.3590 at the opening of the interbank market today, just above the previous close.
Analysts said there will be an intense data agenda today, particularly the real effective exchange rate in the country, inflation in Germany and service sector PMI data abroad. From a technical perspective, 10,100 and 10,200 points in the BIST 100 index represent resistance, and the 10,000 and 9,900 levels are support. He stated that he was in position.
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