Global markets started the week positively.

Global markets started the week positively, driven by strong expectations that the U.S. economy may achieve a "soft landing," as well as China's decision to lower credit interest rates.

The increased risk appetite from last week, following the macroeconomic data released in the U.S. and the European Central Bank's (ECB) interest rate cut decision, has carried over into the new week.

RISKS PLAY A DETERMINING ROLE

Analysts stated that the trajectory of the U.S. and Chinese economies on one hand, and geopolitical risks originating from the Middle East on the other, are decisive for the direction of global markets. While expectations that the U.S. economy will achieve a "soft landing" remain strong, intensifying corporate earnings are also increasing stock and sector-based volatility. Analysts noted that finance ministers and central bank governors from around the world will gather in Washington this week for the annual meeting of the International Monetary Fund (IMF) and the World Bank, and that news flow from this meeting could also influence market direction.

INTEREST RATE EXPECTATIONS DEPEND ON INFLATION

On the macroeconomic data front, the number of new housing starts in the U.S. decreased by 0.5% in September. The number of building permits issued in the country also fell by 2.9% month-on-month in September. While the statements from U.S. Federal Reserve (Fed) officials are being closely monitored, Atlanta Fed President Raphael Bostic stated that he would be patient in lowering interest rates to ensure inflation does not remain above the 2% target. Bostic emphasized that inflation needs to return to the target, saying, "I don't want us to reach a point where inflation has stalled because we haven't been sufficiently restrictive for long enough, so I will be patient and allow the data to show us how inflation is progressing and how employment is progressing." Bostic noted that the Fed's policy rate is likely to be in the range of 3-3.5% by the end of 2025.

50 BASIS POINT CUT BY YEAR-END

On the corporate side, Netflix's shares gained over 11% after exceeding net profit expectations. In the pricing of money markets, there continues to be a strong expectation that the U.S. Federal Reserve (Fed) will cut the policy rate by 25 basis points next month, and it is expected that the bank will implement a total cut of 50 basis points in the two meetings scheduled by the end of the year. While a sideways trend is effective in the bond markets, the U.S. 10-year Treasury yield is currently around 4.08%. The dollar index also started the week at 103.5.

GOLD BREAKS RECORD AFTER RECORD

The price of gold per ounce continued its upward trend, reaching a new record of $2,732.9, driven by expectations that central banks will continue to cut interest rates and geopolitical risks. Meanwhile, with the escalation of geopolitical tension in the Middle East, the price of silver per ounce tested $34.11, the highest level since November 2012. The price of Brent crude oil closed at $72.9 on Friday, down 1.8%, while today it is at $73.2, up 0.4%. The price of Bitcoin stabilized above $69,100 after testing $69,485, the highest level since July, as polls for the U.S. presidential elections show Donald Trump leading in key states.

MARKETS IN GREEN

On Friday, the Dow Jones index gained 0.09%, the S&P 500 index gained 0.40%, and the Nasdaq index gained 0.63% on the New York Stock Exchange. The Dow Jones and S&P 500 indices set closing records. In the U.S., index futures started the new week with an upward trend. In European markets, a positive trend prevailed on Friday, except for the UK. According to the data released in the region, retail sales in the UK rose by 0.3% in September, exceeding expectations. The expectation was for retail sales to decline by 0.3%.

GROWTH EXPECTATIONS IN THE EUROZONE HAVE FALLEN

In the Eurozone, construction output increased by 0.1% in August compared to the previous month. According to the ECB Professional Forecasters Survey published on Friday, participants revised down their economic growth expectations for the Eurozone for the next year. Accordingly, the annual harmonized inflation in the Eurozone was announced as 2.4% for this year, and 1.9% for 2025 and 2026. Compared to the survey results for the third quarter, there was no change in the inflation forecast for the last quarter, while a downward revision of 0.1 points in the forecast for the next year drew attention. Analysts noted that confidence in inflation returning to the ECB's targeted level has increased across the region, while signals of stagnation in economic activity continue to persist. With these developments, on Friday, the DAX 40 index in Germany gained 0.38%, the CAC 40 index in France gained 0.39%, and the FTSE MIB 30 index in Italy gained 0.47%, while the FTSE 100 index in the UK lost 0.32%. In Europe, index futures started the new week with limited gains.

CHINA'S WIND IN ASIA

In Asia, the positive effects of China's decision to lower credit interest rates are leading to a buying trend, except for Hong Kong. In China, a 25 basis point cut was announced in the benchmark interest rates for corporate loans and real estate loans, which are the 1-year and 5-year loan prime rates (LPR). According to a statement from the National Interbank Funding Center, the 1-year loan interest rate was reduced from 3.35% to 3.1%, and the 5-year loan interest rate was reduced from 3.85% to 3.6%.

With the interest rate decision, the aim is to revitalize the real estate and credit markets against the contraction in the real estate sector and to alleviate the burden on individuals and businesses. Analysts noted that this decision has also increased optimism regarding future stimulus measures. Analysts stated that the credit interest rates were lowered within the expected ranges and that there was no surprise, adding that this decision could increase risk appetite in Asian markets, especially in China.

AGENDA IN JAPAN: PARLIAMENT

Meanwhile, the Japanese yen gained value against the dollar on the first trading day of the week ahead of the Japanese parliamentary elections scheduled for Sunday. According to polls, it is predicted that the ruling coalition of the Liberal Democratic Party and its partner Komeito may fall below the 233 seats required for a parliamentary majority. With these developments, the dollar/yen exchange rate is trading at 149.2, down 0.2%. Near the close, Japan's Nikkei 225 index rose by 0.1%, China's Shanghai Composite index rose by 0.7%, and South Korea's Kospi index rose by 0.7%, while Hong Kong's Hang Seng index fell by 0.9%.

LIMITED RISE IN ISTANBUL STOCK EXCHANGE

Domestically, the BIST 100 index on the Istanbul Stock Exchange, which followed a selling trend on Friday, completed the day with a loss of 2.32% compared to the previous close, finishing at 8,793.61 points.

While the Dollar/TL closed at 34.2589 on Friday with a 0.4% increase, it is currently trading at 34.2787, which is 0.1% above the previous close in the interbank market. Analysts state that the data agenda will be calm domestically today, while abroad, the Producer Price Index (PPI) in Germany and the leading indicators index in the USA will be monitored. They noted that technically, the support levels for the BIST 100 index are at 8,710 and 8,500 points, while the resistance levels are at 9,000 and 9,100 points.

The data to be followed in the markets today is as follows:

09:00 Germany, September PPI

10:00 Turkey, August foreign PPI

17:00 USA, September leading indicators index