USA

US Treasury Secretary Scott Bessent stated that the Fed's current policy rate should be at least 150 basis points lower, and that a 50 basis point cut at the September meeting could initiate an easing cycle. This assessment reshaped expectations for monetary policy in US markets. Bessent also suggested that officials could cut interest rates if the revised employment data released immediately after the July meeting were released before the Fed's decision-making process. The Fed held its policy rate steady between %4.25 and 4.50 at its last meeting in July. While markets had already largely priced in the possibility of a 25 basis point cut at the September meeting, expectations of a 50 basis point step strengthened significantly following Bessent's statement. This situation impacted the curve of interest rate cut expectations in the futures market, particularly increasing volatility in short-term interest rate contracts. On the index front, S&P 500 futures fell 0.2%, while Nasdaq 100 futures similarly declined 0.2%. This pullback stemmed from investors seeking profit-taking after the indices closed at record highs the previous day, coupled with uncertainty surrounding the Fed's outlook. The expected negative opening for the tech-heavy Nasdaq 100 signaled that the recent AI-driven rally was losing momentum. In the foreign exchange market, the Bloomberg Dollar Spot Index was flat, with the euro/dollar pair settling at 1.1700 and the pound/dollar pair at 1.3573. In the US bond market, the 10-year Treasury yield remained flat at 4.24%. The stagnant trend in yields is linked to investors' anticipation of both the upcoming Producer Price Index (PPI) data and Fed Chair Jerome Powell's speeches in the coming weeks. In the short term, the PPI data is expected to be a key signal regarding the Fed's inflation outlook. The cryptocurrency market, meanwhile, displayed mixed sentiment. Bitcoin fell 0.7% to $122,126, while Ether rose 0.2% to $4,728. Bitcoin's pullback was attributed to technical selling pressure from overbought territory and a partial weakening in risk appetite. Ether's limited rise was linked to some large-scale investors increasing their positions in Ethereum-based projects. In US markets, uncertainty surrounding the magnitude and pace of the Fed's rate cut cycle has led investors to cautious positioning, while macro data flow and potential guidance from Fed members are expected to determine pricing.

 

EUROPE

European stock futures opened the day slightly higher, influenced by cautious risk appetite in global markets. Euro Stoxx 50 futures % showed a weak outlook ahead of the opening, falling 0.2%. Investors are particularly focused on the upcoming Producer Price Index (PPI) data from the US. This data is expected to be a determining factor in expectations regarding the Fed's potential interest rate cut path in the coming months. European stocks have been highly sensitive to US macro data flow and the Fed's guidance in recent weeks. A potential Fed rate cut in September is particularly crucial for global dollar liquidity and European bond markets. Therefore, Fed Chair Jerome Powell's speeches and potential monetary policy signals in the coming weeks are expected to influence the short-term direction of European indices. Rabobank Strategist Jane Foley said the Fed could adopt a more dovish monetary policy in 2026 if Powell chooses to step down as chairman when his term ends.
This assessment, when considered alongside global interest rate dynamics and, in particular, the European Central Bank's (ECB) own interest rate cut process, is seen as a scenario that could put additional pressure on Eurozone bond yields. European markets will generally be closely monitoring critical US data and Fed guidance, as well as the ECB's statements on inflation and growth expectations. Other key factors that will shape the course of regional indices include energy price volatility, geopolitical risks stemming from the Russia-Ukraine war, and the demand outlook from China.

 

ASIA

US Treasury Secretary Scott Bessent's announcement that the Bank of Japan (BOJ) expects a near-term interest rate hike to control inflation had a significant impact on regional currencies and stock markets. Following this announcement, the Japanese yen gained 0.6% to 146.45, its strongest daily gain in two weeks. This strengthening of the yen put pressure on Japanese stocks amid concerns that it would weaken the competitiveness of exporting companies. The Topix index fell 1.1%, while the Nikkei 225 index also experienced similar losses. Regionally, the MSCI Asia Pacific Index fell 0.4%. Sell-off in technology stocks, in particular, put downward pressure on the index. In the semiconductor sector, Taiwan Semiconductor Manufacturing Co. (TSMC) and SK Hynix shares declined due to uncertainty about the global demand outlook and the perceived risk posed by US-China technology tensions. In contrast, Chinese technology giant Tencent Holdings gained ground thanks to strong financial results that exceeded expectations across all operating segments and the fastest sales growth in four years. A notable difference emerged among regional stock markets. Australia's S&P/ASX 200 Index rose by 0.4%, marking a positive outlook. This rise was driven primarily by the strong performance of mining and commodity companies. Hong Kong's Hang Seng Index fell by 0.4%, while the Shanghai Composite Index, traded in mainland China, remained flat. Japan also dominated the bond market. The yield on 10-year Japanese government bonds rose 3.5 basis points to 1.550%, continuing its recent upward trend. This increase was interpreted as a reflection of expectations that the BOJ would take steps toward monetary tightening. While other bond markets in the region exhibited a calmer outlook, investors will continue to closely monitor Chinese growth data due in the coming weeks and potential signals regarding the BOJ's meeting on September 19th.

 

COMMODITIES

Spot gold prices remained stable throughout the day, trading within a narrow range throughout the session. Investors continued to price in expectations that the Fed might begin a rate cut in September, limiting the upside potential for gold prices. While expectations of a rate cut would normally provide support for gold, the market's extensive prior pricing of this scenario prevented further buying. Furthermore, the release of Producer Price Index (PPI) data from the US and guidance from Fed members in the coming weeks led investors to adopt a wait-and-see approach. This cautious stance also kept gold price volatility low.

Oil prices displayed a more positive outlook. WTI crude oil % rose 0.6% to $63.02 per barrel. Signs of recovery in global demand and speculation about potential supply constraints contributed to this rise. Energy demand data from Asian economies, in particular, indicated that oil consumption could increase in the coming quarters. Ongoing geopolitical risks in the Middle East and news of continued US purchases of strategic petroleum reserves were also supporting prices. However, the market remains cautious about whether the upward trend in oil prices will be permanent. Growth data from the Chinese economy, OPEC+ supply policies, and US crude oil inventory data will be key drivers in the coming period. Investors in the commodity market continue to closely monitor the varying pricing patterns for gold, shaped by interest rate policy expectations, and for oil, by global demand and supply dynamics.

 

Dollar/TL
On a day marked by calm data flow, the exchange rate remained stable amid low volatility. Treasury and Finance Minister Mehmet Şimşek stated, "While production is increasing, the current account deficit remains at sustainable levels." Vice President Cevdet Yılmaz reported that international direct investments, which rose to $6.3 billion in the first half of the year, exceeded $13 billion on an annualized basis, reaching their highest level since May 2023. The announcements had no impact on pricing. Today, the Central Bank of the Republic of Turkey (CBRT) will release its third Inflation Report of the year. CBRT Governor Fatih Karahan's messages during the presentation will be closely watched. Meanwhile, the US PPI and weekly unemployment benefits will be closely monitored. The USD/TRY exchange rate is trading sideways around 40.77 as of 8:00 this morning.

Euro/Dollar
German inflation in July was in line with market expectations at 1.173T0.3 monthly and 1.1800 annually. European Commission President Ursula von der Leyen stated that the online meeting on Ukraine with US President Trump and European leaders went well. US Treasury Secretary Bessent stated that the Fed should cut interest rates by 150-175 basis points, while a statement from Fed officials indicated that more clarity was needed on the impact of tariffs on inflation before a decision on a rate cut was made. The US PPI figure, to be released today, along with growth and industrial production in the Eurozone, will be closely monitored. Above 1.17, resistance levels for the pair will be 1.1734, 1.1770, and 1.1800, while support levels will be monitored on pullbacks at 1.1675, 1.1644, and 1.1600.

XAU/USD
On a day where data flow was calm, fluctuating with slight buyers were influential in the ounce gold price. US Treasury Secretary S. Bessent stated that the Fed should begin interest rate cuts with a 50 basis point cut in September. As pressure on the Fed to cut interest rates increases, the market expects a quarter basis point rate cut from the Fed in September. On the other hand, tomorrow's meeting between D. Trump and V. Putin in Alaska is important in terms of geopolitical developments and may increase volatility in precious metals pricing. Today, PPI and weekly unemployment benefits applications will be followed in the US. As of 08:10 this morning, the ounce of gold is moving around 3.360$, and in the technical view, the 3.330$ – 3.315$ – 3.270$ and 3.245$ levels are support levels; 3.370$ – 3.408$ and 3.438$ levels can be followed as resistance.

Brent Crude Oil
The downtrend in Brent crude oil continued yesterday. The U.S. Energy Information Administration stated that commercial crude oil inventories in the country increased by 3.036 million barrels last week. Contrary to expectations of a decrease, the increase in inventories brought about demand concerns and pressured prices. Tomorrow's Trump-Putin meeting will be closely watched for pricing, and the direction in which geopolitical tensions will evolve will be important for the oil supply side. On the oil demand side, the Fed's September interest rate cut and the 90-day extension of the US-China tariff truce are positive developments. Brent crude oil is trading around 65.60$ as of 08:10 this morning, with support levels at 64.74$, 64.10$, 63.50$, 62.85$, and 62.00$ in the technical view; 66.00$ – 66.53$ – 66.91$ – 67.42$ – 68.10$ and 68.91$ levels can be monitored as resistance.

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