Global markets await US inflation data. In global markets, last week’s emphasis by Fed officials that the fight against inflation is not over yet came to the fore. With the arrival of messages indicating that this struggle could occur without the need for an interest rate increase, the equity markets followed a buying trend.
While it continues to be questioned whether sufficient steps have been taken to combat inflation around the world, volatility in asset prices remains strong. The fact that central banks still have concerns about inflation causes uncertainties to remain strong in the markets.
Although world economies have come a long way in the fight against inflation, statements that there is still a long way to go to declare victory strengthen the uncertainties in the markets.
The tone in Fed Chairman Jerome Powell’s statements was also more “hawkish” than anticipated.
In his statements, Powell stated that they are not sure that a restrictive monetary policy stance has been reached that will reduce inflation to the 2 percent target, and that they will not hesitate to tighten monetary policy further if necessary.
Stating that there is still a long way to go in reducing inflation to 2 percent in a sustainable manner, Powell noted that economic growth was strong in the third quarter, but they expect it to slow down in the coming quarters.
Powell stated that they are wary of the risk that stronger growth could harm progress towards restoring balance in the labor market and reducing inflation, which could require a monetary policy response.
On the other hand, as the demand for the bond issue by the US Treasury fell below expectations, the US 30-year bond interest rate increased by approximately 7 basis points to 4.76 percent. The US 10-year bond rate increased by approximately 9 basis points to 4.60 percent.
While volatility continues in commodity prices, the barrel price of Brent oil completed the week at $81.4 with a decrease of 4.2 percent. The ounce price of gold fell by 2.8 percent and completed the week at $1,938. Cryptocurrency Bitcoin tested the peak of the last 18 months at $37,972.
Analysts stated that investors are focusing on the inflation data to be announced next week for more clues about the course of the Fed’s monetary policy.
In the week starting November 13, Consumer Price Index (CPI) on Tuesday, retail sales on Wednesday, Producer Price Index (PPI), New York Fed industrial index, weekly unemployment benefit applications on Thursday, Philadelphia Fed manufacturing index, industrial production, capacity utilization, housing starts on Friday. and construction permits will be followed.
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