Energy crisis and bond pressure in global markets as Fed decision is awaited
As US bonds and energy markets fluctuate ahead of the Fed's interest rate decision, global risk appetite is weakening.
While the US 10-year Treasury yield exceeding 5% and Brent crude nearing $110 have heightened concerns across global markets, all eyes have turned to the Fed's interest rate decision.
Global Energy Crisis
Geopolitical risks along the Strait of Hormuz and the Red Sea route disrupting shipments are triggering a global energy crisis. The price of a barrel of Brent crude has neared the $100 limit, reaching a four-month high.
The rise in the Mediterranean refinery crack margin to a historic peak indicates that supply in refined products is struggling to meet demand, deepening the crisis.
Fed and Bond Market
While the US 10-year benchmark bond yield has climbed to 5.01%, markets see a high probability of the Fed proceeding with a 25 basis point interest rate hike at its September meeting.
Analysts state that if the Fed hikes interest rates, the economy could slow down, whereas if it does not, control over the bond market could be lost.
Concerns in the Artificial Intelligence Sector
Warnings from industry leaders regarding the deceleration of the development pace of artificial intelligence models have caused losses in technology companies.
While OpenAI postponed its IPO for security reasons, declines were recorded in the Philadelphia Semiconductor Index and shares of global chip manufacturers.
Developments in Domestic Markets
While the BIST 30 index finished the day with a decline, the Capital Markets Board's (CMB) regulations on mutual funds triggered compliance selling in the market.
Turkey's 5-year credit default swap (CDS) risk premium rose to 232 basis points, while the compound yield of the two-year benchmark bond climbed to 40.28%.