In global markets, eyes turned to US inflation data
3In global markets, eyes turned to US inflation data
In global markets, the intense data agenda will be followed next week, mainly the balance of payments and industrial production index in the country, and inflation in the USA, China and Germany abroad.
Global stock markets started the week on a stalemate as US House of Representatives Speaker Nancy Pelosi visited Taiwan despite China's threats, including military retaliation.
After the aforementioned development, there was an increase in risk perception, with China taking decisions that can be described as economic sanctions against Taiwan and launching a large-scale military exercise. On the other hand, the fact that the manufacturing industry and services sector Purchasing Managers' Index (PMI) data announced globally and the company's financial results were better than expectations helped the investor's risk appetite to recover and the declines in the stock markets were not permanent.
Equity markets ended the week undecided, as the employment report data, which was highly anticipated last week and described as an important proof of whether the technical recession in the USA is real or not, came well above expectations and pointed to a "surprise" recovery in the labor market.
With all these developments, the New York stock market and European stock markets rose by an average of 2.2 percent on a weekly basis, while Asian stock markets were mixed. After the US non-farm employment report data, sales gained momentum in the bond market, while the US 10-year bond yield started the week at 2.65 percent and ended the week at 2.83 percent. The dollar index, on the other hand, rose 0.7 percent on a weekly basis to 106.6.
The ounce price of gold tested its highest level in a month at $ 1,795, while the price of Brent oil per barrel fell to $ 92.2, the lowest level it has seen since February 21.
SURPRISE RECOVERY IN US EMPLOYMENT MARKET
Last week, eyes were turned to data on the employment market, as pointed out by economic officials, after the technical recession experienced with the GDP data falling for two consecutive quarters in the US last week.
According to the data released by the US Department of Labor today, employment in non-agricultural sectors in the country increased by 528 thousand people in July. The non-farm employment data, which doubled the market expectations, was expected to increase by 250 thousand people in this period. The unemployment rate in the country also fell from 3.6 percent to 3.5 percent in the same period. Thus, both nonfarm employment and unemployment rate in the US returned to their pre-pandemic levels in February 2020.
On the other hand, the US Supply Management Institute (ISM) non-manufacturing index, which was announced in the US at the beginning of the week, reached the highest level in 3 months with 56.7 in July, pointing to growth in the services sector. Factory orders in the country also increased by 2 percent in June, above the expectations, showing that the manufacturing sector maintains its strength in the high interest rate environment.
Analysts said that the employment data provided the strongest evidence that the economy was not in a recession, which gave relief to the Federal Reserve's (Fed) interest rate hikes. Pointing out that investors' expectations that interest rates will continue to rise rapidly, analysts stated that this situation accelerated the rise in bond yields and strengthened the demand for the dollar.
Analysts stated that after the employment data, the Fed is expected to increase interest rates by 50 basis points with a probability of 33.5 percent and by 75 basis points with a probability of 66.5 percent at the September meeting in the pricing of money markets.
With these developments, the Nasdaq Technology index was 4.07 percent, the S&P 500 index was 1.79 percent, and the Dow Jones index was 0 percent on a weekly basis in the New York Stock Exchange, with the effect of the data and company financial results announced during the week, despite the increase in volatility in the stock markets on Friday last week. 84 gained value.
Next week, investors will follow the US inflation data for July. The data, which reached its highest level since November 1981 with 9.1 percent in June, is expected to decline to 8.7 percent in July.
While a course in line with the global risk appetite was observed with the weak data agenda in Asia last week, it was observed that stock market investors acted "cautiously" due to geopolitical developments.
Next week, investors in Europe will track industrial production in the Eurozone and the Sentix Confidence Index, as well as inflation in Germany and growth and industrial production in the UK.
The macroeconomic data agenda to be announced across Asia includes inflation and foreign trade balance data in China.