Global markets see persistent mixed course

By Murat Aslan

ISTANBUL (AA) – As major central banks worldwide continue to keep policy rates at multi-year highs to combat inflation, macroeconomic data causes more questions on when these banks may introduce rate cuts.

Bond markets saw selling pressure come to the fore after the US inflation data was announced last week, which came in above expectations.

While the US 10-year bond yield remained above 4.30%, it is believed that the concerns over inflation may be effective on pricing in the money markets for a while.

Meanwhile, the Fed is certain to leave its policy rate unchanged at its conferences to be held this Wednesday and in May, causing expectations towards first rate cuts to be introduced in June to weaken, which, in turn, supports the dollar against other currencies, and currently, the US dollar index carries its upward trend to the fourth consecutive trading day, standing at 103.8.

The ounce price of gold continues to move in the $2,150 to $2,189 band, despite the rise in bond yields and the strengthening of the US dollar, while Brent crude oil stands at $86.1 per barrel, finding support from the data revealing strong economic activity worldwide and ongoing geopolitical risks.

At the same time, developments in artificial intelligence (AI) continue to impact the direction of the markets.

The US-based chipmaker Nvidia held the first day of its 2024 GTC AI Conference on Monday, unveiling its new AI chip with a generational leap in speed, leading to the company’s stocks to rise close to 1%.

Alphabet Inc., the Google owner American tech conglomerate, saw its stocks hike more than 4% upon news that the US-based iPhone-maker Apple could implement Google’s AI chatbot “Gemini” in the iPhone, resulting in Apple stocks rising by about 1%.

As for the US electric vehicle maker Tesla, the firm’s stocks gained more than 6% after it announced price increases to the Model Y electric vehicle in the US and some European countries.

In light of these developments, the S&P 500 index soared 0.63%, the Nasdaq Composite 0.82%, the Dow Jones Industrial Average 0.2% on the New York Stock Exchange.

US index futures started the day with a mixed course.

European investors are cautious as the Fed is to announce its decision on Wednesday, and the interest rate decision to be announced by the Bank of England (BoE) on Thursday continues to be focused on by investors.

Considering this, the CAC 40 index in France decreased 0.2%, the FTSE 100 Index in the UK 0.06%, and the DAX 40 index in Germany 0.02%.

In Asia, the interest rate decision by the Bank of Japan (BoJ) remained at the center of attention as the bank decided to end the negative interest rate policy following significant wage increases in large companies.

After a two-day monetary policy conference, the BoJ made a statement that it decided to raise its short-term interest rates from minus 0.1% to a range of 0 to 0.1%, so becoming the last bank to abandon the negative interest rate policy used among the world’s leading central banks with its first interest rate hike in 17 years.

The BoJ also ended the yield curve control on the Japan 10-year government bond, as the bank announced that it will continue bond purchases, while purchases of corporate bonds and similar assets will end in a year.

Japan’s industrial production fell 7.5% and its capacity utilization 0.1% in January, according to data released in the country.

Given these changes, the Nikkei 225 Index in Japan rose 0.4%, while the Shanghai Composite Index in China decreased 0.4%, the Kospi Index in South Korea 0.9%, and the Hang Seng Index in Hong Kong 1% near the close.

As for Türkiye, the BIST 100 Index in Borsa Istanbul followed a selective course on Monday, completing the day at 8,718.11 points with a 1.25% loss.

The US dollar/Turkish lira exchange rate is at 32.3350 at the opening of the interbank market on Tuesday, up 0.6% of the rate of Monday, which closed at 32.3089.

*Writing by Emir Yildirim