In April, without a FOMC meeting, significant macroeconomic data from the US increased recession fears for the last quarter
As the Fed’s fight against inflation continues, the recent Job Openings and Labor Turnover Survey (JOLTS) data showed a contraction at 9.931M. Non-farm payroll data also fell below expectations at 236K, raising concerns about a recession in the US, where interest rates are high.
The ISM Manufacturing Purchasing Managers Index (PMI) came in below expectations at 46.3, while the non-manufacturing PMI also contracted to 51.2, accelerating the dollar’s global depreciation. The fruits of previous interest rate hikes continue to be reaped. Inflation remained below both the previous level and expectations at 5%. A relaxation below this critical level would signal a victory for the Fed. While the unemployment rate declined to 3.5% in the US, positive data-driven news flow occurred, but the retail sales data expanded by -0.1%, causing the services PMI to come in strong in the preliminary release.
Inflation in Eurozone signals Improvement; uncertainty persists UK
In Germany, the largest economy in the region, inflation was announced at 7.4% year-on-year, below the previous level but in line with expectations. Inflation across the region declined to 6.9% yearon- year. Statements from the ECB suggested that interest rate hikes would continue, but the magnitude was not yet clear. In the UK, inflation increased to 10.1%, continuing in double digits. Manufacturing production contracted at 0.0%, while the Manufacturing PMI came in at 47.9, failing to meet expectations. The Services PMI remained above the critical 50 band at 52.9, below the previous level but above expectations. Busy data flow in Asian markets The Reserve Bank of Australia held interest rates steady at 3.6% in April. Although retail sales data were announced above expectations at 0.2%, they failed to surpass the previous level. In New Zealand, the Central Bank raised the policy interest rate by 25 basis points to 5.25%. China continues to generate positive signals, with GDP data expanding at 4.5%, providing a positive boost for the country’s economy. Inflation continued to decline, falling to 0.7% year-onyear. Industrial production growth came in above the previous level but below expectations at 3.9%. The PBOC maintained its minimum loan interest rate at 3.65%. Mixed data and election certainty effect in Türkiye According to recent data, the annual Consumer Price Index (CPI) recorded a decline at 50.51%. The unemployment rate increased, reflecting in the economic calendar at 10%. The ongoing contraction in industrial production remained below expectations at -8.2%. Retail sales data also recorded a decline at 21.5%. The sawtooth market continued on the Istanbul Stock Exchange, maintaining the 4750 – 5135 band. The dollar experienced higher volatility compared to previous months. The ongoing uncertainty and search for direction ahead of the elections paved the way for increased demand for commodity investment instruments such as silver and gold. Cryptos seek balance after BTC-led rally Following the banking crisis and relaxation signals from the Fed, cryptocurrencies experienced a strong rally but faced partial declines due to profit-taking at technical levels. In April, BTC encountered sellers above 31,000 and consolidated around the critical 27,500 pivot area. ETH failed to gain sufficient momentum above 2,100 and recorded a decline of over 300 dollars. Meanwhile, the critical pivot level for AVAX remains 17 dollars.
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