European Inflation on the Rise Again: Eyes on the Fed's Critical Decision!
BS Finance - European Inflation Rising Again: All Eyes on FED's Critical Decision!
Inflation data from the Eurozone indicates a continuation of rising price pressures. The annual Consumer Price Index (CPI), released at 1.7% for September 2024, has risen again in October and November, reaching 2.2% in November. This increase may pose challenges for the European Central Bank (ECB) in continuing interest rate cuts and could make the ECB's monetary policies more cautious.
Similarly, inflation data from the United Kingdom shows a similar trend, revealing rising price pressures across Europe. The view that the ECB should adopt a more careful approach to interest rate cuts is gaining strength.
On the other hand, the Federal Reserve's (FED) interest rate decision announced today is a major focus for global markets. While there is a strong expectation of a rate cut, the statements made by President Jerome Powell will be crucial not only for the U.S. economy but also for global economic strategies and market volatility. These developments could have a decisive impact on the European economy and global monetary policy strategies.
FED Rate Cut Looks Certain Expectations for the FED's interest rate decision are shaping up in the markets. According to the regional Fed presidents' votes and the pricing in the futures markets, the likelihood of the Fed reducing rates by 25 basis points to a range of 4.25% – 4.50% is highlighted at 95.4%. The probability of rates remaining unchanged in the current range of 4.50% – 4.75% is calculated at 4.6%.
Global Dollar Index Flat The Global Dollar Index is trading at the brink of 107 with a 0.07% increase at the moment. The FED's decision and Jerome Powell's speeches, to be disclosed later today, will play a determining role in the direction of the dollar. Meanwhile, U.S. 10-year Treasury yields continue to rise, currently trading at 4.40%.
Inflation in the Eurozone Rising Below Expectations Inflation data for November in the Eurozone has been released. The Core Consumer Price Index (CPI) recorded a 2.7% annual increase in line with market expectations. The overall CPI, however, showed a 2.2% annual increase, falling short of the expected 2.3%. Month-on-month, the inflation rate registered at -0.3%, aligning with expectations.
Currencies EUR/USD With inflation data falling in line with expectations, there has been no significant movement in the EUR/USD pair. The pair continues to trade around 1.0498, following a calm trend post-data release.
USD/TRY The USD/TRY rate continues to rise steadily, recording very limited gains on a daily basis. As of today, it has surpassed the 35.00 level, trading at 35.02. This level has been recorded as a historical peak. As pressures on the Turkish Lira continue in the market, this volatility in the exchange rate is being closely monitored in line with economic developments.
GBP/USD The Consumer Price Index (CPI) data from the United Kingdom for November was announced as 2.6% annually and 0.1% monthly, in line with market expectations. This data did not have a significant impact on the economic outlook, and the GBP/USD pair continues to trade neutrally around the 1.27 level, indicating that markets are awaiting more data regarding the UK economy.
Istanbul Stock Exchange As of 13:40, the Borsa Istanbul 100 Index is showing a flat trend and continues to trade at the 10,011 level. A calm activity is observed in the market, with trading volume around 30 billion lira.
Commodities Gold Spot gold is continuing to trade at 2,648, with a 0.13% increase. Ahead of the FED meeting, gold prices have found support between the 2,635-2,640 levels.
Meanwhile, in the interbank market, gram gold is trading at 2,982 lira, reflecting a 0.23% increase, while in the Grand Bazaar, gram gold is being traded around 3,030 lira. Markets are closely monitoring the decisions to be made by the FED and global economic developments.
Silver Spot silver is trading at 30.44, reflecting a 0.3% decrease and showing a negative trend compared to gold. This decrease reflects the weakening demand for silver in the markets. In the Grand Bazaar, gram silver is trading at 34.82 lira.
Brent Oil Brent oil prices are continuing to exhibit volatility. With a daily increase of 0.51%, it is currently trading at 73.29.
Cryptocurrency Bitcoin is experiencing a daily decline of 1.6%, trading around 104,500. This decrease in the cryptocurrency market fluctuates based on overall market sentiment and investor sentiment.
Ethereum shows a more negative divergence, trading at 3,873 with a 3.44% decline. Ethereum is following a more pronounced negative trend compared to Bitcoin, and this drop in prices aligns with the overall negative atmosphere in the cryptocurrency market. Investors are cautiously observing the future price movements of both cryptocurrencies.