Global Markets Await Guidance from Fed's Powell
US Economy Surpasses Expectations, European, US, and Hong Kong Markets Closed for Easter Holiday
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Stock markets showed little movement following the release of stronger-than-anticipated US growth figures on Thursday. Notably, European, US, and Hong Kong markets remained closed on Friday in observance of the Easter holiday.
According to Thursday's data, the US economy expanded by 3.4% in the fourth quarter, surpassing expectations. While growth figures were revised upward for the reporting period, initial forecasts had projected a 3.2% expansion.
Persisting uncertainties regarding the Federal Reserve's timeline for interest rate adjustments continued to linger. Market observers are closely monitoring verbal guidance from Fed Chair Powell, along with personal consumption expenditure (PCE) data, for clues about the central bank's next moves.
Additionally, the Michigan Consumer Sentiment Index (MCSI) for March saw an upward revision to 79.4, as reported on Thursday. Meanwhile, the number of initial jobless claims in the US dropped to 210,000 last week, falling below market expectations.
Following these developments, market sentiment tilted towards a 64% probability of the Fed implementing its first rate cut in June, as indicated by money market estimates.
On Thursday, the US 10-Year Bond yield held steady at 4.2050%, while the price of gold surged by 1.7% to reach $2,233 per ounce, marking its highest daily close on record and an 8.2% increase for the first quarter of 2024.
Moreover, the US Dollar Index extended its upward trajectory for the fourth consecutive trading day, closing at 104.6 with a marginal uptick of 0.1%.
Geopolitical tensions and uncertainties surrounding crude oil supply and demand dynamics were brought to the forefront, with the price of Brent crude oil climbing by 12.9%.
In terms of equities, the S&P 500 index posted a robust 10.2% gain in the first quarter, marking its strongest performance for the initial three months since 2019. Similarly, the Dow Jones index surged by 5.6%, achieving its most significant first quarter advancement since 2021, while the Nasdaq index saw an impressive 9.1% increase.
Across European stock markets, trading remained subdued on Thursday, with no transactions taking place on Friday due to the Easter holiday.
Francois Villeroy de Galhau, a member of the European Central Bank's Governing Council, hinted at potential rate cuts this spring, independent of the Federal Reserve's decisions.
Meanwhile, Asian equity markets saw positive momentum, with Japan's parliament approving a substantial budget for fiscal year 2024 aimed at addressing pressing challenges. However, industrial production in Japan fell below expectations in February, accompanied by a slight uptick in the unemployment rate.
Near market close, Japan's Nikkei 225 index gained 0.4%, South Korea's Kospi index edged up by 0.1%, and China's Shanghai composite index rose by 0.6%.
In Turkey, the Borsa Istanbul showed favorable performance on Thursday, with the BIST 100 index closing at 9,079.97 points, marking a 3.10% gain.
Regarding currency markets, the USD/TRY exchange rate saw a slight increase on Monday, closing at 32.3366. As of 12:07 p.m. (0907GMT), the exchange rate stood at 32.3770.
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