All eyes turn to Fed's Powell in global markets

By Muhammed Said Tanil

ISTANBUL (AA) - Stock markets were flat after better-than-expected US growth data was released Thursday, while European, US and Hong Kong markets will be closed Friday for the Easter holiday.

The US economy grew 3.4% in the fourth quarter, above expectations, according to data released Thursday.

While the growth data was revised upwards in the reporting period, the expectation was that the economy would grow 3.2% in the last quarter.

Uncertainties about when the Fed will start cutting interest rates continue to persist and clues about the bank’s next steps will be sought from Fed Chair Powell's verbal guidance as well as personal consumption expenditure (PCE) data.

The Michigan Consumer Sentiment Index (MCSI) was revised upwards to 79.4 in March, according to data released Thursday.

The number of first-time jobless claims in the US fell to 210,000 last week, below expectations.

Following the developments, the probability of the Fed’s first rate cut estimates in June was 64% in the money markets.

The US 10-Year Bond rose to 4.2050% on Thursday, moving in a tight range, while the ounce price of gold hiked 1.7% to $2,233, marking it the highest daily closing of all time, hence climbing 8.2% in the first quarter of 2024.

The US Dollar Index also carried its upward trend to the fourth consecutive trading day Thursday and finished at 104.6 with an increase of 0.1%.

Meanwhile, geopolitical tensions and uncertainties about the supply and demand of crude oil came to the fore, as the barrel price of Brent crude oil rose 12.9%.

The S&P 500 index soared 10.2% in the first three months, which is the best first quarter gain since 2019.

The Dow Jones index climbed 5.6%, achieving its strongest first quarter performance since 2021, and the Nasdaq index hiked 9.1%.

European stock markets followed a flat course Thursday, and there will be no transactions Friday due to Easter.

Francois Villeroy de Galhau, member of the Governing Council of the European Central Bank (ECB), said the bank will probably start a measured rate cut this spring, and it will happen regardless of the Fed’s decision.

He noted that it is not of existential importance whether the cut is introduced in April or June.

The FTSE 100 index in the UK rose 0.26%, the MIB 30 index in Italy 0.03%, the DAX 40 index in Germany 0.08%, and the CAC 40 index in France by 0.01%.

As for the Asian equity markets, they followed a positive course, though no transactions took place in Hong Kong due to Easter.

Japan’s parliament passed a 112.5 trillion yen ($743.2 billion) budget for fiscal year 2024, with Finance Minister Suzuki Shunichi saying it aims to tackle urgent challenges that cannot be postponed.

The Tokyo Consumer Price Index (CPI) hiked 2.6% year-on-year and the core CPI increased 2.4%, according to data released Friday in Japan.

Industrial production remained below expectations with a monthly decrease of 0.1% in February, while the unemployment rate rose to 2.6% as per recent Japanese preliminary data.

Near the close, the Nikkei 225 index in Japan gained 0.4%, the Kospi index in South Korea 0.1% and the Shanghai composite index in China 0.6%.

As for Türkiye, Borsa Istanbul followed a favorable course Thursday as the BIST 100 index finished the day at 9,079.97 points with a gain of 3.10%.

The US dollar/Turkish lira (USD/TRY) exchange rate ended at 32.3366 on Monday, up 0.2% from its previous close as it followed a buying course.

The exchange rate between the two currencies currently stands at 32.3770 as of 12.07 p.m. (0907GMT).

*Writing by Emir Yildirim