SAFAKNA TURKEY – Last week after the US Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BOE) maintained their hawkish stance despite a slowdown in tightening.
While the central banks of many countries, such as Switzerland, Norway, India, Canada, Taiwan and Mexico, continued to raise interest rates, data released in the US and Europe showed that the weakening economy continues, although the data showed lower inflation.
On the other hand, the continued rise in cases due to the Covid-19 outbreak in China has also contributed to a decrease in investor risk appetite.
FOCUS ON THE DATA AGENDA
In connection with these events, it was seen that the volatility in the stock markets increased last week, while volatility is expected to decrease after the release of data in the new week.
In this context, the US consumer confidence index, revised growth in the third quarter, personal income and spending and orders for durable goods, producer price index (PPI) in Germany, consumer price index in the euro area, growth in the third quarter in England and inflation in Japan, data for October will be monitored closely.
In the week, which will also track the decisions of the Bank of Japan (BoJ) meeting, the focus of investors will be the consumer confidence index, as well as the decision of the Central Bank of the Republic of Turkey on interest rates (CBRT).
Tougher messages from Fed officials
While statements from bank officials intensified after the Fed meeting, New York Fed President John Williams said on Friday that the bank is likely to raise interest rates more than expected.
While San Francisco Fed President Mary Daly emphasized that the Fed is far from its goal of price stability and that there is still a long way to go, Cleveland Fed President Loretta Mester noted that she expects the Fed to raise interest rates more than she predicts. .
WORST 5-WEEK CLOSING FOR US INDICES
In terms of macro data, the U.S. Manufacturing Purchasing Managers’ Index (PMI) fell to 46.2 in December on Friday, marking the industry’s biggest contraction since May 2020.
Due to these developments, the New York stock market on Friday followed the course of selling, while the Dow Jones index fell 0.85%, the S&P 500 index fell 1.11%, and the Nasdaq index fell 0.97% from -for growing fears about a recession.
Last week, the indexes fell by an average of 2.2 percent, closing the worst in 5 weeks. The yield on 10-year US bonds increased from 3.49 to 3.52 percent.
The dollar index, on the other hand, remained unchanged at 104.6. Futures for indices in the US also started the new week with a decline.
INFLATION IN EUROPE IS NOT TWO-DIGITAL
On the European side, fears of an energy crisis are seen to have faded into the background with a solution to natural gas supply problems for at least this winter by filling reservoirs, while the mixed signals of the announced data raise fears of a recession. stay strong.
Eurozone annual inflation, which stood at 10.6% in October, is still in double digits from 10.1% in November, according to data released on Friday. On the other hand, despite the fact that the leading PMI in the Eurozone in December was 47.8 in the manufacturing industry and 49.1 in the services sector, it remained in the contraction zone.
Due to these developments, European stock markets followed a negative trend on Friday, while the DAX 40 in Germany fell by 0.67 percent, the CAC 40 in France by 1.08 percent and the FTSE 100 in the UK by 1.27. percent.
While weekly index losses approached 3 percent, 10-year bond yields tested their highest level in 5 weeks in Germany, France and Italy. The euro/dollar parity was balanced above 1.06. Futures contracts for indices in Europe started a new daily flat.
ASIAN STOCK EXCHANGES ALSO START THE WEEK DOWN
On the Asian side, Chinese officials said the country is in the first of three waves of Covid-19 expected this winter, while a growing number of cases keep economic concerns high on the agenda.
The news, based on reports from China’s economic officials, reported that next year the People’s Bank of China will provide abundant liquidity to the real economy and financial markets, and economic policy will focus on inflation and employment.
On the Japanese side, the BOJ is expected to keep its policy rate ultra-low at its meeting this week, while the Japanese government will consider revising its 2013 joint statement with the BOJ, which commits to “achieve a 2 percent inflation rate.” “. goal as early as possible.
Asian stock markets started the week negative, with China’s Shanghai Composite Index down 1.52 percent, Japan’s Nikkei 225 down 1 percent and Hong Kong’s Hang Seng down 0.7 percent.
CBR MADE A DECISION ON INTEREST ON THURSDAY
Domestically, the BIST 100 index continued its upward momentum on Friday, ending the day at 5,214.29 points up 0.49 percent, thus improving the weekly closing record by 4.18 percent.
After closing at 18.6542 with a limited gain of 0.06 percent from the previous week, the dollar/Turkish lira started the new week at 18.6450 at the open of the interbank market.
Analysts say a cautious tack has followed amid rising fears of a recession in global stock markets. Analysts said efforts to rebalance the markets will come to the fore due to a busy data agenda this week ahead of the Christmas holidays, and noted that interest rate decisions in Japan and Turkey will be the focus of investors.
Analysts noted that the data agenda today is relatively weak, and reported that technically 5100 points of the BIST 100 index is support, levels 5250 and 5340 are in the resistance position.
The following data should be monitored in the markets today:
10.00 Turkey, October international investment position
12.00 Germany, December Ifo Business Confidence Index (AA)
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