Global Markets Trade Negative Amid Fed Minutes and Geopolitical Tensions
Geopolitical risks in the Middle East and Fed minutes pointing to a rate hike by the end of the year caused a negative trend in global markets, while the barrel price of Brent crude exceeded 102 dollars.
Geopolitical tensions in the Middle East and the Federal Reserve's published minutes pointing to a new rate hike by the end of the year created widespread selling pressure in global markets, causing volatility in bond and oil prices.
Geopolitical Risks and Oil Prices
Geopolitical tensions maintaining their presence in the Middle East continue to pressure asset prices. News flow that the White House asked the Pentagon to develop attack options against Iranian targets before the November 3 elections heightened concerns.
While the barrel price of Brent crude exceeded 102 dollars, the decrease in ship traffic in the Strait of Hormuz deepened concerns over energy supply.
Fed Minutes and Rate Expectations
The minutes of the Federal Open Market Committee's September 15-16 meetings revealed that another policy rate hike is likely by the end of the year. Officials stated that inflation risks remain to the upside.
While money markets price in expectations that the Fed will keep interest rates steady this month, the possibility of an additional hike at the December meeting is being strongly evaluated.
Bond Markets and Currency Characteristics
The yield on the U.S. 10-year Treasury bond hit 5.36 percent, recording its highest level since April 2002. The 30-year bond yield rose to 5.73 percent.
While the dollar index followed a flat course at 102.2, the ounce price of gold traded at 4,133 dollars with a 0.5 percent increase.
Declines in Global Stock Indices
On the New York stock exchange, the S&P 500, Nasdaq, and Dow Jones indices lost value. European stock markets also followed a selling-heavy course due to geopolitical uncertainties and energy prices.
On the Asian side, despite the reopening of Chinese markets, the Nikkei 225, Hang Seng, Kospi, and Shanghai Composite indices declined due to energy supply concerns.
Istanbul Economy Forum and Borsa Istanbul
While the BIST 100 index on Borsa Istanbul finished the day with a loss in value, the Istanbul Economy Forum organized by the CBRT at the Istanbul Finance Center brought central bank governors together.
Treasury and Finance Minister Mehmet Şimşek, CBRT Governor Fatih Karahan, Fed Board Member Christopher Waller, and BoE Governor Andrew Bailey took part within the scope of the forum.