Murat Aslan
09 October 2023•Update: 10 October 2023
ISTANBUL
Global financial markets started the week with a negative course amid growing geopolitical risks following a surprise Hamas attack on Israeli towns.
The inflation and recession dilemma had again an impact on asset prices last week, while geopolitical risks over the weekend increased volatility, especially in commodity prices.
Although Brent oil ended last week with an 8.7% decline, it started the new week with a 3.4% increase at $86.8 per barrel.
According to analysts, the possibility that the conflicts between Israel and Hamas could expand further has caused the risk perception to remain high and that rising oil prices could fuel inflation concerns on a global basis.
Thus, the price of an ounce of gold rose 1% to hit $1,850.
On the other hand, the US employment report announced last week continued to make pricing difficult.
The US economy added 336,000 jobs in September, sharply higher than market estimates, the Labor Department announced on Friday.
The unemployment rate, on the other hand, remained unchanged at 3.8% in August.
Analysts said that the fact that the labor market remains strong despite the measures taken by the US Federal Reserve within the scope of fighting inflation boosts the uncertainties regarding the bank's future policies.
On the bond market, while the selling pressure moved into the sixth week, economists stressed that developments in the Middle East may affect investor behavior.
The US 10-year bond traded around a 16-year high of 4.8% on Monday, the dollar index was at 106.3.
The market will focus on the eurozone inflation data due this week, while the ECB is projected to keep the policy rate unchanged for the rest of the year.
The Gaza-based resistance group Hamas launched Operation Al-Aqsa Flood against Israel early Saturday, firing a barrage of rockets. It said the surprise attack was in response to the storming of Al-Aqsa Mosque in occupied East Jerusalem and increased settler violence.
In retaliation, the Israeli army launched Operation Swords of Iron against Hamas in the Gaza Strip, killing at least 493 Palestinians and wounding at least 2,751 others.
At least 700 Israelis have been killed and over 2,300 others wounded in the fighting, according to the Israeli Health Ministry.
