US election possible outcomes continue to impact global markets

ISTANBUL

Central banks around the world are gradually approaching the end of their tight monetary policies to fight inflation, while the potential results of the US elections continue to affect the global market.

Concerns over US President Biden's health persisted, and his announcement on Sunday to withdraw from the nomination and support Vice President Kamala Harris, along with former US President Donald Trump's leading position in the polls after the attack on him, has caused controversy.

On the macroeconomic data front, this week's intense data agenda, particularly US growth, suggests that the US Federal Reserve (Fed) may cut interest rates three times until the end of the year.

While the latest data points to a cooling in the labor market, the Fed's easing policy actions, which open up space for expansionary policy steps, are dampening high-risk sentiment across the globe.

On the other hand, the financial results and calendar of giant companies such as Alphabet, Tesla, Qualcomm, and IBM are expected to increase stock and sector-based volatility throughout the week.

Moreover, macroeconomic data to be released and the verbal guidance of ECB officials could change pricing, while analysts say the ECB is almost certain to make at least two interest rate cuts for the rest of the year.

US markets faced a decline on Friday, with the Nasdaq index falling 0.81%, the S&P 500 dropping 0.71%, and the Dow Jones decreasing by 0.93%.

The dollar index stands at 104.3, while Brent crude oil prices have stabilized at $82.20 per barrel. The US 10-year bond yield closed at 4.23%, and gold prices rose by 0.2% to $2,405 an ounce.

European index futures started the week on a buy-heavy course.

In Europe, the FTSE 100 index in the UK fell 0.6%, Italy's MIB 30 index dropped 0.91%, France's CAC 40 index decreased 0.69%, and Germany's DAX 40 index was down 0.1% on Friday.

In Türkiye, the BIST 100 index in Borsa Istanbul closed at 11,156.20 points, up 0.15% from the previous close. The USD/TRY exchange rate traded at 33.0249 at the opening of the interbank market on Friday.

In addition, international credit rating agency Moody's upgraded Türkiye’s credit rating by two notches from B3 to B1 on Friday, keeping it positive.

Near the close, Japan's Nikkei 225 index fell 1.2%, South Korea's Kospi index dropped 1.1%, and China's Shanghai index decreased 0.1%, while Hong Kong's Hang Seng composite index rose 0.7%.

*Writing by Sahika Olgun