Global markets cautiously started a busy week that will focus on following a dense macroeconomic data calendar, particularly including the US employment report. While concerns persist regarding whether the fight against inflation globally will end in a recession and the worries posed by conflicts in the Middle East, recent macroeconomic data releases have helped limit concerns in the markets. Analysts expressed that signals from data, especially labor-intensive data to be announced this week, could be decisive for the steps the Federal Reserve (Fed) will take in the future, emphasizing that the mentioned data are expected to provide more information on the direction of the US economy.

Additionally, comments by Fed Chairman Jerome Powell today will be closely monitored. According to data released on Friday, personal consumption expenditures saw a below-expectation increase in August at a monthly rate of 0.2%. The personal consumption expenditures price index also saw increases beneath expectations in August, recording a monthly rate of 0.1% and an annual rate of 2.2%. The core personal consumption expenditures price index, which the Fed considers as an inflation measure by excluding food and energy, increased by 0.1% monthly and 2.7% annually in August. While the annual change in the index occurred parallel to market expectations, it was anticipated to have a 0.2% monthly increase. Analysts stated that the below-expectation inflation indicators have increased expectations that the Fed may now focus on supporting the labor market and continuing to cut interest rates. Furthermore, the University of Michigan’s consumer confidence index in the US was upwardly revised to 70.1 in September, reaching the highest level in 5 months.

Expectations for a significant interest rate cut have been reinforced, while market expectations still point towards a 75 basis point reduction by the Fed by the end of the year, with a 54% probability of a 50 basis point rate cut in November. As for the 10-year US Treasury yield, it is currently at 3.76%, and the dollar index started the week at 100.4.

Gold prices remain near their peak, with the price of an ounce of gold edging lower by 0.5% on Friday, currently trading at $2,655, which is 0.1% below the previous close. Meanwhile, the barrel price of Brent oil started the week with an increase and is currently at 72.3 levels, representing a 0.5% rise.

On Friday, the Dow Jones index rose by 0.33%, while the S&P 500 index fell by 0.13% and the Nasdaq index declined by 0.39%. The Dow Jones index, after hitting a record high during the day at 42,628.32 points, closed at 42,313.00 points, marking an all-time high. Futures contracts in the US are starting the new week in a positive trend.

In Europe, markets displayed an upward trend on Friday, and focus now shifts to Germany’s Consumer Price Index (CPI). While uncertainties regarding the speed and magnitude of the European Central Bank’s (ECB) easing process persist, it is predicted that a decrease in inflationary pressures and signs of economic stagnation could increase the bank’s dovish attitude. Eurozone consumers’ inflation expectations for the next 12 months reached the lowest level seen since September 2021. Additionally, the Economic Sentiment Index in the Eurozone declined by 0.3 points to 96.2 in September.

In Asia, markets started the first trading day of the week with a mixed trend, with Chinese markets surging while Japanese markets suffered losses. China’s economic incentives announced last week continued to have a positive impact, with statements from the government indicating that banks would lower mortgage interest rates to solve existing issues in the housing sector.

China’s Purchasing Managers’ Index (PMI) for the manufacturing industry in September came in at 49.8, above expectations, while the Caixin manufacturing PMI for September was below expectations at 49.3. Although the Service PMI came in below expectations at 50.0, and Caixin’s service sector PMI was 50.3, indicating that economic activity in the service sector remained robust. Analysts noted that economic activity in the manufacturing sector is still weak, but with the announced economic incentives, a recovery in activity can be expected in the coming months.

Furthermore, in Japan, former Secretary-General of the Liberal Democratic Party (LDP) and former Minister of Agriculture and Defense, Shigeru Ishiba, won the LDP presidential election. Ishiba is expected to be declared Japan’s new Prime Minister in the House of Representatives controlled by the LDP and its coalition partner Komeito in the coming days. Analysts pointed out that expectations for the election of Economic Security Minister Sanae Takichi and uncertainties about the new leader’s economic policies have led to selling pressure in the country’s equity markets. Data released in Japan today showed a 3.3% decrease in industrial production in August, below expectations, while August retail sales exceeded expectations at 0.8%.

Near the closing, the Shanghai Composite index in China surged by 6.6%, and the Hang Seng index in Hong Kong rose by 3%, while the Nikkei 225 index in Japan fell by 4.9%, and the Kospi index in South Korea dropped by 1.2%.

As for Borsa Istanbul, which followed a selling trend on Friday, the BIST 100 index closed at 9,777.46 points with a 0.53% decrease from the previous close. While the dollar/Turkish lira exchange rate closed at 34.1694 on Friday with a 0.1% increase, it is currently trading slightly above the closing level at 34.1750 in the interbank market. Analysts pointed out that today, domestic Producer Price Index (PPI) and monthly money and banking statistics will be released, along with growth data in the UK, inflation data in Germany, and the Dallas Fed’s manufacturing index in the US, in addition to speeches by Fed Chair Jerome Powell and ECB President Christine Lagarde, which will be closely monitored. Support levels for the BIST 100 index are at 9,700 and 9,600 points, while resistance levels are situated at 10,050 and 10,200 levels.