All eyes on global markets are on inflation data to be announced in the USA

The congressional midterm elections held in the USA, which resulted in the victory of the Democrats, became the main determinant on the direction of global markets this week. The success of the Democrats in the elections weakened US President Donald Trump's political hand in implementing his policies.

The fact that Democrats gained the majority in the House of Representatives and the Senate strengthened the predictions that regulatory steps towards the artificial intelligence sector may accelerate and this could slow down the sectoral progress in the USA.

The support of other members to the messages of Yassamin Ansari, a Democratic member of the House of Representatives from the state of Arizona, advocating stricter regulations for the artificial intelligence sector and a temporary pause on the development of advanced artificial intelligence technologies, increased the regulatory risks in this field.

The selling pressure, which started in the USA with the leadership of the technology sector due to concerns that artificial intelligence investments may be restricted, quickly spread throughout the world, and the total market value of global stock markets lost approximately 4 trillion dollars in Thursday's transactions.

On the last trading day of the week, there was a recovery in technology stocks, with supportive statements coming from the White House for the artificial intelligence sector and some investors using the declines in semiconductor stocks as a buying opportunity.

While the search for a safe haven, which intensified with outflows from stocks in the markets, increased the demand for bonds, a decline was observed in global bond interest rates. On the other hand, the barrel price of Brent oil dropped by approximately 16 percent on a weekly basis to $97.8, with the expectations that the turmoil in the Middle East would fade as the Democrats gained the majority in both houses of Congress.

Non-farm employment in the USA increased by 165 thousand people, exceeding market expectations

On the macroeconomic developments side, while the growth and personal consumption expenditures data announced last week in the USA indicate that inflationary pressures may continue in the coming period, the fact that the non-agricultural employment data announced yesterday was significantly above expectations supported this outlook.

While non-farm employment in the USA increased by 165 thousand people in October, exceeding market expectations, average hourly earnings increased by 0.4 percent on a monthly basis, exceeding expectations.

These data confirmed that labor markets in the country maintain their strong course. The continued resilience of the labor market has led to pricing for an interest rate increase by the US Federal Reserve (Fed).

While the statements of Fed officials are also followed by investors, Richmond Fed President Thomas Barkin stated in an interview with CNBC that he thinks the Fed will need to increase interest rates further, but he is not yet sure about the size of the increase and at what pace.

Cleveland Fed President Beth Hammack also said interest rates should be at a restrictive level to reduce inflation to the bank's target. "I think monetary policy will need to take a tight stance to bring inflation back to 2 percent in a timely manner," Hammack said. he said.

San Francisco Fed President Mary Daly stated that interest rate increases may need to be continued to control inflation, but it is too early to say how much further interest rates should be increased. "My expectation is that we will have to tighten monetary policy further," Daly said. he said.

St. Louis Fed President Alberto Musalem emphasized that inflation continues to be the most important source of concern in his meetings with companies in his region, and stated that the best thing that can be done in terms of growth and employment is to reduce inflation again in a timely manner.

While the October inflation data to be announced in the USA next week will be in the focus of investors, geopolitical developments in the Middle East will also be closely monitored.

With these developments, the US 10-year bond interest rate decreased by 5 basis points on a weekly basis to 4.84 percent, while the ounce of gold increased by 5 percent to 4 thousand 70 dollars, ending its 3-week decline. The dollar index closed the week at 102.3 with a 0.4 percent increase.

New York stock market remained negative

Stock markets in the USA were sold this week. On a weekly basis, the S&P 500 in the New York Stock Exchange fell by 2.68 percent, the Nasdaq index fell by 3.37 percent and the Dow Jones index fell by 0.94 percent.

While the balance sheet season continues on the corporate side, Apple, one of the leading technology companies in the USA, announced its financial results this week.

Although Apple's net sales increased by approximately 12 percent on an annual basis in the July-September period, reaching 114.5 billion dollars, and its net profit increased by 12 percent to 30.7 billion dollars, the company's warning that memory chip costs would continue to increase and this would put pressure on the gross profit margin led to an increase in sales in its shares. The company's shares lost 0.66 percent weekly.

With the current developments, the shares of Marvell Technology, one of the US-based semiconductor manufacturers, lost 28.1 percent, Broadcom's shares lost 9.9 percent, Intel's shares lost 14.4 percent and Nvidia's shares lost 8.8 percent.

This week, investors lost 22 percent of Micron Technology, 11 percent of AMD, 7.8 percent of Texas Instruments Incorporated, and 7.8 percent of GlobalFoundries.

Next week, wholesale stocks on Monday, inflation on Tuesday, second-hand house sales on Thursday, weekly unemployment benefit applications, and Producer Price Index (PPI) data on Friday will be followed.

Inflation in Europe doubles ECB's target

European stock markets were mixed this week on concerns about artificial intelligence and signals from macroeconomic data.

Accordingly, while the leading technology stocks in the region fell sharply, the shares of ASML, which has an important role in the production of high-tech chips, lost 9.1 percent of their value.

On the other hand, the Bank of England (BoE) increased the policy rate by 25 basis points to 4 percent, in line with market expectations. In the statement made by the BoE, it was stated that the war in the Middle East is in its ninth month and that global energy prices continue to remain high.

In the statement, it was stated that the increase in energy prices has direct effects and this increase will continue to be reflected in the energy bills of companies and households.

In his verbal guidance after the decision, BoE Governor Andrew Bailey noted that it seems that this will not be the last interest rate increase unless the US/Israel-Iran War ends.

In addition, annual inflation in the Eurozone rose to 4 percent, twice the European Central Bank's (ECB) target of 2 percent. The speeches that ECB President Christine Lagarde will make at various events in the region next week will be followed carefully.

With these developments, on a weekly basis, the FTSE 100 index in the UK and the DAX index in Germany decreased by 0.09 percent, while the CAC 40 index in France increased by 2.13 percent and the MIB 30 index in Italy increased by 1.12 percent.

In the week that will start on November 9, ECB President Lagarde's speech will be followed on Wednesday, UK growth, industrial production, ECB President Lagarde's speech will be followed on Thursday, and growth data in the Eurozone will be followed on Friday.

Losses deepen in South Korean markets

With the current risks, sharp losses were observed in Asian markets, mainly in semiconductors. In South Korea, the Kospi index attracted attention with a loss of value exceeding 25 percent in the last month.

When looked at on a weekly basis on a company basis, the shares of South Korean semiconductor manufacturers SK Hynix lost 20.2 percent and the shares of Samsung Electronics lost 16.1 percent.

On the other hand, financial support measures were announced in China to support stock markets and strengthen investor confidence.

Analysts stated that these steps were in the nature of support measures for capital markets rather than a large-scale fiscal stimulus package covering the entire economy.

Accordingly, the People's Bank of China (PBOC) stated in its statement yesterday that swap transactions will be carried out with financial institutions and that these transactions could inject more than 100 billion yuan ($15 billion) into the stock market. In addition, local media reported that the China Securities Regulatory Commission (CSRC) is examining plans to relax collateral rules to increase liquidity.

According to the data announced in the region, the Purchasing Managers Index (PMI) of the service sector in Japan decreased to 51.7 in October, and the composite PMI decreased to 52.1. Inflation data to be announced in China in next week's data calendar comes first in terms of importance.

With these developments, on a weekly basis, the Kospi index in South Korea decreased by 11.71 percent, the Nikkei 225 index in Japan decreased by 9.25 percent, while the Hang Seng index in Hong Kong increased by 5.10 percent and the Shanghai composite index in China increased by 1.39 percent.

Next week, consumer and producer inflation data will be followed in China on Monday, foreign trade balance data in Japan on Tuesday, and producer inflation data in Japan on Thursday.

CBRT will announce the last Inflation Report of the year

BIST 100 index in Borsa Istanbul, which is predominantly buying domestically, closed at 11,482.60 points, with an increase of 6.72 percent on a weekly basis.

Within the scope of fund developments, Minister of Treasury and Finance Mehmet Şimşek stated that 130.2 billion liras have been paid to 420 thousand 31 unique people so far.

On the other hand, Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan will announce the last Inflation Report of the year in Istanbul on November 12.

CBRT President Karahan stated that they updated the 2026 year-end inflation forecast upwards to 28 percent at the third Inflation Report information meeting of the year and said, "We predict that inflation will stabilize at the 5 percent level, which is the inflation target in the medium term, after decreasing to 15 percent at the end of 2027 and 9 percent at the end of 2028." He used the following expressions.

On the macroeconomic data side, domestic inflation figures were announced. Accordingly, the Consumer Price Index (CPI) increased by 2.58 percent and the Domestic Producer Price Index (D-PPI) increased by 1.65 percent on a monthly basis in October. Annual inflation was recorded as 29.77 percent in consumer prices and 27.41 percent in domestic producer prices.

Dollar/TL also completed the week at 50.1550, 0.4 percent above the previous weekly closing.

Next week, domestic industrial production data on Tuesday, Inflation Report on Thursday, balance of payments and market participants survey data will be followed on Friday.