Election wind in global markets: Dollar and oil are in decline, all eyes are on central banks

While the political uncertainties that decreased in global markets with the completion of the midterm elections in the USA supported the risk appetite, the Democrats' cautious approach to developments in the field of artificial intelligence increased regulation concerns in technology investments.

According to unconfirmed results, the success of the Democrats in Congress weakened the possibility of President Donald Trump to implement his policies, while the expectation that the resulting divided structure would prevent sharp policy changes was welcomed by the markets. With the election results, the 2-year bond yield in the USA decreased to 4.56 percent and the 10-year bond yield decreased to 4.85 percent, falling to the lowest levels in the last 2 months.

DECLINE IN OIL

The drop in the dollar index to 101.09, the lowest level of the last 5 weeks, brought purchasing to commodities priced in dollars. An ounce of gold rose to $4,137 and silver climbed to $53. Oil prices, on the other hand, fell as the Democrats' Congressional majority increased their hopes for peace in the Middle East, and Brent oil fell to 93.8 dollars. On the political front, Vice President JD Vance and Donald Trump attributed the midterm election defeat to the "Iran war" and the high cost of living triggered by the war.

Although political uncertainty has decreased, regulatory risks on the artificial intelligence side have put pressure on data center and chip manufacturers. While there were sharp declines in Applied Digital and Core Scientific shares in the USA, a worried picture was also seen in Asian markets. While the semiconductor industry-weighted South Korean Kospi index lost more than 5 percent in value, SK Hynix and Samsung shares experienced sharp losses.

On the macroeconomic side, European stock markets climbed to the peak of the last two months, led by banking stocks, with the impact of the decline in US bond interest rates. While the increase in inflation to 4 percent in the Eurozone draws attention, the eyes of the markets are turned to the policy rate decision to be announced by the Bank of England (BoE).

BORSA ISTANBUL HAS INCREASED

Domestically, the BIST 100 index at Borsa Istanbul closed the day at 11,478 points, gaining 4.12 percent in value. At the same time, a total of 62.2 billion lira was paid to more than 390 thousand investors within the scope of extraordinary liquidation within the country. While Dollar/TL is traded at 50.04, the markets will follow the BoE interest rate decision as well as the statements of European Central Bank (ECB) President Lagarde today.