While the data announced in the USA last week, indicating a strong stance in the country’s economy, supports “soft landing” scenarios, the fact that company profitability continues to exceed expectations around the world has increased investors’ risk appetite.
Recalling that new peaks were seen in the New York stock market last week, led by technology companies that announced better-than-expected revenues and profits in their fourth quarter balance sheets, analysts said that the inflation data to be announced tomorrow may increase volatility in the markets.
On Friday, US inflation data was revised. The US Department of Labor reduced the increase in the Consumer Price Index (CPI) in December from 0.3 percent to 0.2 percent. Core inflation, which excludes food and energy items, remained the same.
Stating that the downward revision in December inflation data is important, analysts stated that this is a positive development for the Fed, which is looking for more evidence that inflation pressures are decreasing sustainably to start reducing interest rates.
Analysts stated that this week’s intense data agenda and the verbal guidance of Fed officials are the focus of investors, and that the probability of the Fed leaving the interest rate constant in March is priced at 83 percent and the probability of starting to reduce interest rates in May is priced at 63 percent.
Following these developments, the US 10-year bond interest started the week at 4.17 percent, while the dollar index started flat at 104 levels.
Carrying the downward trend for the fourth trading day in a row, the ounce price of gold is currently trading at $2,024 with a 0.1 percent decrease, while the barrel price of Brent oil, which has risen in the last five business days, is currently traded at $81.5 with a 0.1 percent decrease.
On the cryptocurrency markets, Bitcoin carried its upward trend to the seventh consecutive trading day and approached 49 thousand dollars. Thus, Bitcoin tested its highest level in the last month.
On the last trading day of last week, the Nasdaq index on the New York Stock Exchange gained 1.25 percent in value, making its highest daily closing since November 2021, while the S&P 500 index renewed its peak with an increase of 0.57 percent. Dow Jones index decreased by 0.14 percent. Index futures contracts in the USA started the new week with a mixed course.
While the negative trend in European stock markets, excluding Italy, stood out on Friday, the intense data agenda became the focus of investors this week.
Analysts reminded that mixed signals were received from the data in Europe, the region where the inflation and recession dilemma is felt the most, and said that the macroeconomic data to be announced across the region this week could signal the steps to be taken by central banks in the coming period.
Stating that the ZEW economic confidence index in Germany and the Eurozone as well as inflation and growth data in the UK will be followed during the week, analysts stated that the verbal guidance of central bank officials is also in the focus of investors.
On the other hand, over the weekend, the European Union (EU) Council announced that an agreement was reached on the new fiscal rules negotiated between the member countries and the European Parliament (EP). The new fiscal rules aim to reduce the public debts and budget deficits of the member countries gradually and sustainably.
In addition, the euro/dollar parity, which carried the upward trend to the fifth consecutive trading day, is currently at 1.0800, 0.1 percent above its previous close.
On Friday, the FTSE 100 index in England lost 0.30 percent, the DAX 40 index in Germany lost 0.22 percent and the CAC 40 index in France lost 0.24 percent, while the MIB 30 index in Italy decreased by 0.28 percent. . Index futures contracts in Europe started the new week with a mixed course.
On the Asian side, no transactions took place in China, Hong Kong, Japan and South Korea due to the New Year Holiday.