Pre-Market Analysis: Notable Developments Today

Pre-Market Analysis: Today’s Notable Developments

Tempered optimism prevails in global stock markets. U.S. indices are trading in a stable range as investors adopt a wait-and-see position ahead of the Federal Reserve (Fed) decision. The recent notable weakness in employment has led to a depreciation of the dollar index and an increase in expectations for a loosening of interest rates. This situation could bring about upward attempts in currency pairs and increased volatility following the Fed's announcement.

U.S. Political Developments and Their Effects

The political rhetoric in the U.S. continues to be high on the market agenda. President Trump's characterization of Europe as a union led by weak leaders and his emphasis on the need for elections regarding Ukraine is raising global geopolitical risks. Trump's statements suggesting support for various political figures in Europe are being closely monitored for their impact on transatlantic relations.

Employment Data and Commodity Markets

In the economic sphere, Trump’s statements indicating he would highlight names who are "open to rapidly lowering interest rates" in the new Fed chair selection are strengthening expectations for a departure from a hawkish tone. The JOLTS job openings in the U.S. were recorded at 7.6 million, while the ADP employment data came in at 4,750. This situation continues to show a weak outlook in the employment market.

In the commodities sector, gold regained momentum towards the $4,200 level after a decline in the early days of the week. The moderate tone adopted by Fed members and the potential for interest rate cuts are driving gold into a short-term upward trend.

The Impact of the Fed Decision on the Markets

The Fed's decisions, set to be announced today at 22:00, along with Powell's statements, will be a significant determinant in the markets. The predominant expectation among investors is a 25 basis point cut, bringing the policy rate to a band of 3.50%–3.75%. This situation could lead to temporary sharp pricing in the markets.

Current Status in Turkish Markets

A notable recovery trend has been observed in the Borsa Istanbul in recent days. The BIST 100 index has traded above 11,200 points for the first time in 70 days, influenced by expected interest rate cuts from both the Fed and the Central Bank of the Republic of Turkey (TCMB). Surpassing the 11,160 level indicates both the completion of the peak formation and the breaking of the medium-term downward channel to the upside.

Another development that has captured investors' attention is the banking index. With strengthened expectations of interest rate cuts, a decrease in borrowing costs is anticipated. The index could support a move towards the previous peak as it settles above the 16,500 level.

On the currency front, the Turkish Lira (TL) is sometimes demonstrating weak performance compared to other emerging market currencies. However, upward movements in the exchange rate are being kept under control.