Murat Aslan
06 January 2022•Update: 06 January 2022
ISTANBUL
Global stock markets were on a negative course on Thursday following signals by the US Federal Reserve that it may start to increase interest rates earlier and faster than expected.
The minutes from the Fed’s Dec.14-15 policy meeting, published on Wednesday, showed officials discussing the need to raise rates sooner than previous estimates due to the overall economic outlook, inflation situation, and labor market conditions.
Some members of the Federal Open Market Committee (FOMC) also noted that it would be appropriate to start reducing the size of the Fed’s balance sheet after the interest rate hike begins.
The minutes pushed the US 10-year yield to its highest level since April 2021, crossing 1.73% on Thursday and was last at 1.7299%, after a close of 1.7030% on Wednesday.
On the macroeconomic data side, private sector employment in the US increased by 807,000 in December 2021, exceeding market expectations.
While there have been retreats in cryptocurrencies and commodity prices after the Fed’s statements, Bitcoin is currently trading at $42,980, slipping 2.3% further after a 5% fall on Wednesday.
Major US stock indices opened mixed despite the strong private payrolls data.
The Dow Jones industrial average was up by only 2 points to 36,801, while the S&P 500 shed 4 points, or 0.1%, to 4,788 and the Nasdaq fell by 70 points, or 0.45%, to 15,552.
In Europe, an intense data calendar will be a point of focus on Thursday.
European stock markets were on a positive course as they closed on Wednesday before the Fed minutes.
According to macroeconomic data announced in Asia on Thursday, the Purchasing Managers’ Index (PMI) of the service sector rose to 52.1 in Japan and to 53.1 in China.
With these developments, Asia stocks end the day in negative territory.
The Asia Dow, which includes blue-chip companies in the region, lost 67.47 points, or 1.76%, to close at around 3,759 points.
Tokyo's Nikkei 225 stock exchange dropped by 844.29 points, or 2.88%, to 28,487, and China's Shanghai stock exchange decreased by 9.1 points, or 0.25%, to 3,586 points.
*Writing by Aysu Bicer
