As the US presidential elections approach, the Federal Reserve is anticipated to reduce its policy rate by 25 basis points to a range of 4.50% to 4.75% this week. This decision follows recent employment data that has influenced market expectations, with an 82% likelihood of a rate cut also projected for December.
The political landscape remains tense as Vice President Kamala Harris and former President Donald Trump are nearly tied in polls, both around 48.5%. Trump leads in five of the seven crucial swing states. His proposed policies include imposing new tariffs and tax cuts, contrasting with Harris's alignment with the current administration's focus on reducing costs for the middle class.
Market reactions have been notable, with the US Dollar Index starting the day at 103.9, while the US-10 Year Futures bond yield was at 4.31%. The Dow Jones fell 0.61% and the S&P 500 declined by 0.28% on Monday, with futures trading mixed as of Tuesday.
In the broader context, the eurozone's manufacturing Purchasing Managers' Index (PMI) rose to 46 points in October, indicating some recovery, while Germany's investor confidence index improved slightly. However, European stock markets saw declines, with the DAX 40 down 0.56% and the CAC 40 dropping 0.50%.
In Asia, markets showed a positive trend, particularly in China, where Premier Li Qiang reaffirmed the government's commitment to achieving a 5% growth target. The Chinese Caixin services PMI exceeded expectations, reaching 52.
In Türkiye, the Consumer Price Index (CPI) rose by 2.88% month-on-month in October, indicating ongoing inflationary pressures despite an annual decline to 48.58%.
The US dollar/Turkish lira exchange rate closed at 34.3445 on Monday, reflecting a slight increase in value.