The developments regarding the war in Europe and the epidemic measures in China cause the concerns that the inflationary pressures in the global economy will increase in the future. While the expectations that central banks will resort to aggressive interest rate hikes within the scope of the fight against high inflation are getting stronger, it is feared that this situation will drag the countries into recession.
US Federal Reserve (Fed) Chairman Jerome Powell's statements yesterday also pointed to the continuation of aggressive interest rate hikes. Stating that they will continue to increase interest rates until inflation falls, Powell said, "We should see inflation fall clearly and convincingly. If we cannot see this, then we will have to think about acting more aggressively." he said.
On the macroeconomic data side, according to the data released yesterday, industrial production in the USA increased by 1.1 percent monthly in April, above the expectations. Retail sales increased by 0.9 percent in the same period, pointing out that despite the inflationary environment, consumer appetite remained alive.
There was an increase in the New York stock market yesterday, with the positive data announced and the views that the recession concerns are overpriced, especially in growth and technology stocks. The Nasdaq index rose 2.76 percent, the S&P 500 index rose 2.02 percent and the Dow Jones index rose 1.34 percent. With the effect of the increase in risk appetite, the dollar index carried its decline from the peak of 20 years to the third day and stabilized at the level of 103.4.
On the other hand, the barrel price of Brent oil is trading at 111 dollars after losing 1.3 percent yesterday after the positive trend in the number of new types of coronavirus (Kovid-19) cases in China and the news that the US government will lift some restrictions on Venezuela.
On the European side, the news that the negotiations between Russia and Ukraine were suspended pointed to the continuation of the uncertainties regarding the course of the war, and caused concerns about inflation and growth to remain on the agenda. In the face of the increasing downside risks in the economy, the European Central Bank (ECB) also received a 50 basis point interest rate hike signal for the first time. ECB Board Member Klaas Knot, who is shown among the most hawkish members of the bank, said that he is in favor of a 25 basis point increase in interest rates in July, but that they will not exclude a higher increase if necessary.
Despite these developments, the DAX 30 index rose by 1.59 percent in Germany, the CAC 40 index rose by 1.30 percent in France and the FTSE 100 index in the UK rose by 0.72 percent yesterday with the increase in risk appetite. The euro/dollar parity is stabilized at 1.0530 today, after hitting 1.0556, the highest level in nearly a week, yesterday. The pre-inflationary pound/dollar parity, which is expected to reach its highest level in 40 years with the data to be announced today, is also trading at 1.2470, 0.2 percent below the previous closing level.
The fact that no new cases were found for 3 consecutive days outside the quarantine zones in China increased the expectations that the measures would be lifted. Although this situation supported the risk appetite, the decrease in the housing prices announced in the country pointed out that the fragilities in the real estate sector, which has debt rollover problems, continue. On the other hand, according to data released today, Japan's economy contracted by 1 percent on an annual basis in the first quarter, for the first time in two years. With these developments, a mixed course was observed in the stock markets, while the Shanghai composite index decreased by 0.1 percent in China close to the closing, and the Nikkei 225 index increased by 0.8 percent in Japan.
Domestically, the BIST 100 index closed the day at 2,394.83 points with an increase of 0.17 percent, with purchases coming close to the closing, although it was under selling pressure led by banking stocks yesterday. Dollar / TL is traded at 15,8450 at the opening of the interbank market today, after closing at 15,8926 with an increase of 2.2 percent compared to the previous closing level yesterday.
Analysts stated that investors continue to seek returns with developments pointing to the continuation of inflation and growth-oriented risks, and said that volatility in the stock markets is expected to remain on the agenda for a while.
Stating that the G7 Finance Ministers Summit and the statements made by the ECB officials today are at the center of the markets, analysts said that the data agenda is calm in the country, while inflation in the Eurozone and England, construction permits and housing starts in the USA will be monitored abroad.
Analysts stated that technically, the BIST 100 index is at the support level of 2.350 and the resistance at 2.470 points.
The data to be followed in the markets today are as follows:
09.00 UK, CPI for April
12.00 Euro Zone, CPI for April
15.30 US, April housing starts and building permits
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