Home Blog Market Analysis Weekly Market Analysis 25-29 September 2023

Weekly Market Analysis 25-29 September 2023

by Buse Kozok
Weekly Market Analysis  25-29 September 2023

Last week, global markets followed the Central Banks' interest rate decisions. The US Federal Reserve (Fed) announced its interest rate decision on Wednesday and the Bank of England (BoE) announced its interest rate decision on Thursday. In addition, UK and Euro Zone inflation data were followed. While the consumer price index in the Eurozone increased by 0.5% monthly in August, annual inflation, which was 5.3% in July, decreased to 5.2% in August. While consumer prices in the UK increased by 0.3% monthly in August, annual inflation was 6.7%, below expectations.

At its September meeting, the US Federal Reserve (Fed) did not change the policy rate in line with expectations and left it constant in the range of 5.25%-5.50%, thus the bank continued to keep interest rates at the highest level of 22 years. Most Fed officials signaled another interest rate hike this year. Fed Chairman Powell, in his statement after the interest rate decision, emphasized that they are ready to raise interest rates again if it is appropriate, and stated that they are trying to find the final level at which they can stop. Following Fed Chairman Powell's hawkish statements, US 10-year bond interest rates rose and reached their highest level since October 2007 at 4.498%. The Bank of England (BoE) kept the policy rate unchanged at 5.25%. Thus, the Bank did not increase borrowing costs for the first time since December 2021. The bank signaled that policy was only on pause and that it would intervene if inflation, which is well above the 2% target, did not fall as expected. Global markets followed a mixed course throughout the week. We also saw this uncertainty in the ounce of gold. Although $1.900 remains above the support, the ounce of gold follows a horizontal trend.

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