Weekly Outlook (November 18-22, 2024)
As we move past a critical week, last week’s economic calendar was quite busy. On the Turkish front, Retail Sales data was reported at 2.3%. This week, all eyes will be on the critical Central Bank of Turkey (CBRT) Interest Rate Decision scheduled for Thursday. While no change in interest rates is expected, the real focus will be on whether there will be any adjustments in the future interest rate policy. If the likelihood of a rate cut increases, the risk of further depreciation in the local currency may also rise.
On the U.S. front, following Trump’s election victory, speculation has increased that inflationary pressures may rise in the coming period, leading to expectations that the Federal Reserve’s interest rate cuts may be more limited. However, upon closer examination, Trump will officially take office on January 20, and the speculation around tax tariffs remains just that—speculation for now. On the other hand, the inflation data released from the U.S. last week came in at 2.6%, which was in line with expectations. Since this figure was higher than the previous month's inflation rate of 2.4%, the possibility of more limited interest rate cuts by the Fed has gained more traction in the markets.
Meanwhile, last Thursday, Federal Reserve Chairman Jerome Powell’s speech created high volatility in the markets. Powell stated that he did not signal any urgency for lowering interest rates. Following this, the Dollar Index moved upward, while the probability of a 0.25% rate cut by the Fed in December, as priced in by the CME FedWatch, dropped from 85% to 65%. The reduced likelihood of a Fed rate cut continues to support the selling pressure on precious metals.
Meanwhile, this week, all eyes in the U.S. will be on Thursday’s releases: Initial Jobless Claims, the Philadelphia Fed Manufacturing Index (November), and Existing Home Sales (October). On Friday, the Manufacturing Purchasing Managers' Index (PMI) (November) and the Services PMI (November) will be key data points to watch. Factors that could support a Fed interest rate cut include:
- The potential deterioration in the labor market,
- The possibility of a slowdown in growth figures,
- Continued decline in inflation.
- These three factors remain the key areas to monitor.
In particular, the increase in domestic demand due to the import quota continues to lead to price discrepancies. At the beginning of the week, the difference between global markets and the Turkish market on a per-ounce basis started at around $130.
Disclaimer: The information, comments, and recommendations provided here do not constitute investment advisory services. Investment advisory services are offered on an individualized basis, taking into account personal risk and return preferences. The content, comments, and recommendations provided here are of a general nature and are not intended to be directive. These recommendations may not be suitable for your financial situation or risk and return preferences. Therefore, making investment decisions based solely on the information here may not lead to results that align with your expectations.
