The perfect storm in the markets: 1 trillion dollars flew, all eyes are on the central banks!

Global share markets this week; It followed a negative course due to the impact of geopolitical risks in the Middle East, increasing concerns about the financing costs of artificial intelligence investments and mixed balance sheets from technology giants. All eyes are on the monetary policy decisions to be taken by the central banks of the USA (Fed), Europe (ECB) and Japan (BoJ) in the new week.

The risk of escalation of conflict tensions in the Middle East and high transportation costs pushed oil prices up, bringing December delivery Brent oil close to 117 dollars. While the increase in energy costs strengthened inflationary pressures, the expectation that high borrowing costs would negatively affect artificial intelligence investments, which require very high budgets, caused sharp sales in chip companies. Over $1 trillion has been wiped from the total market value of global stock markets. While the US 10-year bond interest rate fell below 5 percent in search of a safe haven, the ounce of gold fell by 4.1 percent on a weekly basis to $ 3,995.

EYES ON CENTRAL BANKS IN THE USA AND EUROPE

A mixed picture stood out in the New York stock exchange. While Meta's net profit increased by 264 percent in the balance sheet season, reaching 9.9 billion dollars, Tesla's profit decreased by 43 percent and remained at 787 million dollars. While the Fed is expected to keep the policy rate constant in the new week, the markets will closely monitor the balance sheets of Amazon, Microsoft and Alphabet.

European stock markets were also on the decline as geopolitical risks and intensifying street events in France threatened public finances. France's 10-year bond interest rate reached its highest level since 2002 at 5.07 percent, leaving behind US bonds. In the new week, it is considered certain that the ECB will keep the interest rates constant on Thursday and the BoJ will keep the interest rates constant on Friday, which will directly affect the Asian stock markets.

INTEREST RATE CUT FROM CBRT AFTER 5 MEETINGS

BIST 100 index in Borsa Istanbul, which is predominantly sales-oriented in the country, completed the week with a decrease of 5.16 percent at 11,116.99 points. Dollar/TL closed at 49.69. The most notable internal development of the week was that the Central Bank of the Republic of Turkey (CBRT) cut interest rates for the first time after 5 meetings, reducing the policy rate by 100 basis points to 36 percent.

On the other hand, the bill that includes the payment of losses related to investment funds decided to be liquidated through the Investor Compensation Center (YTM) in cooperation with the CMB and SDIF was accepted in the Turkish Grand National Assembly. Domestic markets will be closed for half a day on Wednesday and a full day on Thursday due to October 29 Republic Day.