In global markets, the negative trend that has prevailed since the beginning of the week continues with the macroeconomic data announced around the world triggering the fears of recession and the uncertainties regarding the size of the rate hike by the US Federal Reserve (Fed) in the next month's meeting.
The leading Purchasing Managers' Index (PMI) for the manufacturing industry and service sector, which was announced around the world yesterday, revealed that economic activity continues to lose strength.
While this situation strengthened the threat of recession, the focus was on the actions to be taken by the central banks and the evaluations to be made at the Jackson Hole Economic Policy Symposium as inflation concerns continued to dominate.
Making statements before the symposium, Minneapolis Fed President Neel Kashkari said that his biggest fear is; He said the Fed and financial markets are downplaying inflation pressure. Arguing that more aggressive rate hikes than expected are needed to prevent inflation, Kashkari stated that the policy rate will need to be increased by 2 more points by the end of next year.
Currently, the expectations that the Fed will increase interest rates by 50 and 75 basis points at its September meeting in money market pricing have been equalized with 50 percent.
On the macroeconomic data side, the US manufacturing PMI fell to 51.3 in August, the lowest level since July 2020. In the same period, PMI saw a 27-month low of 44.1 in the services sector. New home sales in the country also decreased by 12.6% monthly in July to 511,000, the lowest level since January 2016.
Following the data pointing to the continuation of the contraction in economic activity, a selling trend was observed in the New York stock market yesterday. While the Dow Jones index fell 0.47 percent and the S&P 500 index decreased by 0.22 percent, the Nasdaq index remained flat. The dollar index, which tested its highest level in almost 1.5 months with 109.3 yesterday, fell to 108.6. The US 10-year bond yield was also stabilized at 3.04%, after seeing its highest level since July 11 with 3.08 percent yesterday.
Manufacturing industry PMI data announced yesterday on the European side remained in the contraction zone in Germany, France and England. In parallel, the manufacturing industry PMI in the Euro Zone fell to 49.7 in August, the lowest level in 26 months, while the service sector PMI decreased by 1 point to 50.2.
The data to be followed in the markets today are as follows:
10.00 Turkey, August Financial Services Confidence Index
15.30 US durable goods orders for July
17.00 US, pending home sales for July
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