Continuing inflationary pressures in economies, inflation being above the target, and leading central banks taking steps to increase interest rates are causing an increase in selling pressure in global bond markets.
Rising oil prices fuel inflation fears, leading to increased predictions that central banks around the world, especially the US Federal Reserve (Fed), may accelerate the tightening process in monetary policies.
The increase in long-term bond interest rates increases borrowing costs on a global scale and increases the pressure on stock valuations. Although there have been retreats after the sharp increases in bond yields around the world this week, bond interest rates are still at high levels, causing an increase in risk perception in global markets.
This week, the US 10-year bond interest hit the highest level since 2002, at 5.34 percent and the 30-year bond rate at 5.69 percent.
Later, the US 10-year bond interest stabilized at 5.28 percent and 30-year bond interest at 5.61 percent.
Supported by the rise in bond interest rates, the dollar index reached its highest level since April 2025 with 102.2. The dollar index completed the week with an increase of 1 percent at 101.9.
The decline in the euro, especially due to financial concerns originating from France, also supports the dollar.
An ounce of gold lost 3.4 percent of its value this week, falling to 4 thousand 141 dollars, due to sharp increases in bond yields and increased demand for the dollar.
On the other hand, non-agricultural employment in the USA increased by 29 thousand people in September, below expectations, while the unemployment rate increased to 4.2 percent. Non-agricultural employment in the country increased by 162 thousand in August.
Following the non-farm employment data announced in the USA, the probability of the Fed increasing interest rates in October decreased to 23 percent.
The core personal consumption expenditures price index, which the Fed closely monitors as an inflation indicator and excludes food and energy items, increased by 0.2 percent on a monthly basis and 3 percent on an annual basis in August.
Market expectations were for the core personal consumption expenditures price index to increase by 0.3 percent monthly and 3.3 percent annually. The index increased by 0.1 percent monthly and 3 percent annually in July.
Analysts stated that risk appetite increased in the markets on Friday after the employment data announced in the USA, but that sales pressure prevailed in the markets on a weekly basis due to the sharp selling pressure in the bond market, and stated that the effects of the non-agricultural employment data will be monitored next week.
On the other hand, US President Donald Trump announced that Europe has agreed to release a large amount of its stock of diesel to the market.
Leaders of G7 countries decided to release a total of 100 million barrels of diesel and other oil reserves within 4 months, under the coordination of the International Energy Agency (IEA), in order to stabilize global energy markets.
With these developments, the December term barrel price of Brent oil increased by 3.5 percent on a weekly basis to 102.3 dollars, due to the impact of the ongoing geopolitical risks, although it decreased on Friday.
New York stock market was mixed
A mixed trend was observed in the New York stock market this week.
This week, the Dow Jones index lost 1.26 percent, the S&P 500 index lost 0.27 percent, while the Nasdaq index gained 0.45 percent.
Next week, service sector PMI and ISM service sector PMI will be announced on Monday, foreign trade balance on Tuesday, Fed meeting minutes on Wednesday, weekly unemployment benefit applications on Thursday, and University of Michigan consumer confidence index on Friday.
European stock markets remained negative
European stock markets followed a negative trend this week as the increase in energy costs triggered inflationary concerns, which increased the pressure on the bond market.
The increase in energy costs and inflation data from France, Italy and Germany, which came above expectations, increased the selling pressure on European markets.
Annual inflation in the Eurozone reached its highest level in 3 years with 3.8 percent.
France's 10-year bond interest rose to 4.96 percent, the highest level since 2002. As concerns about France's public debt increase, the Paris administration aims to narrow the budget deficit by limiting expenditures and increasing tax revenues.
The 30-year bond interest rate in the UK rose above 6 percent, reaching the highest level since 1998. Concerns about public debt are also prominent in the UK. The new budget is expected to be announced in the country on October 28.
With these developments, the FTSE 100 index in England lost 2.18 percent, the DAX 40 index in Germany lost 0.70 percent, the CAC 40 index in France lost 2.24 percent and the FTSE MIB index in Italy lost 2.66 percent.
Next week, the Producer Price Index in the Euro Zone, service sector PMI on Monday, retail sales in the Euro Zone on Tuesday, industrial production in Germany on Wednesday, foreign trade balance in Germany and meeting minutes of the European Central Bank (ECB) on Thursday will be followed.
Asian stock markets remained negative except Japan
Rising bond yields and oil prices weighed on risk appetite in Asian stock markets this week.
Japan's 10-year bond interest hit the highest level since 1995 at 3.11 percent. On the macroeconomic data side, Tokyo inflation for September in Japan increased from 1.9 percent to 2.7 percent on an annual basis, and this strengthened the predictions that the BoJ may increase interest rates.
The Chinese government announced that it will implement new support policies in order to limit the slowdown in the economy and evaluate measures to stabilize the real estate market.
On the other hand, the People's Bank of China (PBoC) reduced the 1-year loan interest rate of 3 policy banks by 25 basis points to support the real economy.
On the other hand, the rise in technology stocks was effective in the positive trend in the Japanese stock market.
On a weekly basis, the Nikkei 225 index in Japan gained 2.93 percent in value, the Kospi index in South Korea lost 1.09 percent, the Hang Seng index in Hong Kong lost 2.19 percent, and the Shanghai composite index in China lost 1.19 percent.
Next week, service sector PMI and consumer confidence index will be followed in Japan on Monday, current account balance in Japan on Thursday, and retail sales in Japan on Friday.
Domestic inflation will be monitored next week
Domestically, Borsa Istanbul's BIST 100 index, which followed a sales-oriented trend this week, closed at 12,270.18 points, with a decrease of 4.88 percent on a weekly basis.
Dollar/TL also completed the week at 49.1285, 0.35 percent above the previous weekly closing.
On the other hand, the Capital Markets Board (CMB) decided to make an interim payment to all participation share holders whose reconciliation has been completed in the funds established by Tera, Pusula, Atlas and Hedef Portföy Yönetimi AŞ and which are in the liquidation process, as an offset to the payment they will be entitled to as a result of the liquidation.
CMB stated that the interim payment amount to be paid to each investor separately for each fund will not exceed 1 million lira.
In addition, President Recep Tayyip Erdoğan, in his speech at the General Assembly of the Parliament on the occasion of the opening of the 28th Term 5th Legislative Year of the Turkish Grand National Assembly, stated that they have successfully overcome the problem that arose in a certain part of the fund market. Stating that they resolved this issue quickly, within the framework of capital market rules, by observing equity and justice, without compromising anyone's rights, Erdoğan said, "I hope we will not allow this issue to turn into a threat to our economic security and social peace." he said.
Minister of Treasury and Finance Mehmet Şimşek also attended the Global Emerging Markets Conference organized by S&P Global via remote connection and made evaluations regarding the latest developments in the global economy, geopolitical tensions and the Turkish economy.
Şimşek stated that they acted very quickly regarding the latest developments in the fund markets. Noting that they quarantined problematic portfolio management companies and related funds, Şimşek said, "The process of liquidation and resolution of the funds in question has begun. Our aim here was to stop the spread of the contagion to the rest of the system, and we think we were largely successful in this." he stated.
The Central Bank of the Republic of Turkey (CBRT) announced that, within the scope of the changes it made in the reserve requirement application, the growth limit for SME loans from 4.5 percent was increased to 5 percent, and the blocked facility rates for Turkish lira required reserves were reduced.
Next week, inflation will be followed on Monday and industrial production on Friday.
Economists participating in the AA Finance Inflation Expectations Survey estimate that the Consumer Price Index (CPI) will increase by 2.18 percent in September.
According to the average inflation expectations of economists for September (2.18 percent), annual inflation, which was 31.51 percent in August, is expected to decrease to 30.16 percent in September.
On the other hand, the average of economists' year-end inflation expectations was 29.66 percent.
