The continuation of the deterioration in the supply chain and the course of the new type of coronavirus (Kovid-19) epidemic cause the risk theme, which has arisen in parallel with the concerns about inflation and growth in the global economy, to remain on the agenda. Uncertainties about the future of monetary policies also make it difficult for investors to see ahead, and it is stated that the decisions of the Fed Open Market Committee (FOMC), which will be announced at 21.00 tonight, will play an important role in shaping expectations.
Analysts stated that the Fed is expected to take its first step back within the scope of monetary incentives that it put into use during the epidemic, and said that announcing a $15 billion reduction in the monthly asset purchase program of $120 billion was priced accordingly.
Pointing out that investors are focusing on whether to give any clues regarding the timing of the rate hike, analysts noted that the text of the decision and the tone to be used in Fed Chairman Jerome Powell's statements will be important for the future direction of the markets.
Yesterday, while discussions about whether to reappoint Fed Chairman Powell, whose term will expire in February next year, were also followed, US President Joe Biden announced that he will announce the candidates he has chosen soon. Biden's "big mistake" assessment of China's non-participation in the Glasgow climate summit brought along concerns about bilateral relations that still remain on the agenda.
Despite supply chain woes, the number of Kovid-19 cases and expectations that the Fed will begin to withdraw its stimulus, indices in the New York stock market renewed their closing records yesterday. The Dow Jones index gained 0.39 percent, the S&P 500 index gained 0.37 percent and the Nasdaq index gained 0.34 percent, thanks to the support of the companies' profitability, which continued to be better than expected. The dollar index is flat today after closing at 94.1 levels with an increase of 0.2 percent yesterday. The 10-year bond yields of the USA, which were in the range of 1.53-1.58 percent yesterday, are just above 1.55 percent today. It is noteworthy that the index futures contracts of the USA started today with sellers.
On the European side, the manufacturing sector PMI fell to 58.3 in October, with a decrease of 0.2 points in the Eurozone compared to the previous month, and to 57.8 in Germany with a decrease of 0.4 points. While the indices pointing to a weakening in the manufacturing sector due to supply problems remain in the growth zone, supporting optimism, the Euro Area unemployment rate and service sector PMI data, as well as the speech of the European Central Bank Christine Lagarde, are expected to have an impact on the direction of the markets. Prior to these developments, the DAX index in Germany increased by 0.94 percent and the CAC 40 index in France by 0.49 percent, while the FTSE 100 index in the UK decreased by 0.19 percent. After closing below 1.16 again yesterday, Euro/dollar parity is moving sideways at 1.1580 levels today. Index futures contracts in Europe, on the other hand, are following a selling course today.
On the Asian side, concerns about the spread of problems in the real estate sector in China to other sectors continue to weigh on equity markets, while the country's services sector PMI rose by 0.4 points to 53.8 in October compared to the previous month, which was described as a "surprise". Despite the positive data, a selling trend was observed in Asian stock markets as investors took a cautious stance before FOMC decisions. With these developments, Shanghai composite index in China is 0.6 percent, Hang Seng index in Hong Kong is 1 percent and Kospi index in South Korea is 1.1 percent. On the other hand, there are no transactions in Japanese markets due to the official holiday.
On the commodity side, before the OPEC+ group meeting of the Organization of Petroleum Exporting Countries (OPEC) and some non-OPEC producer countries, which will be held tomorrow, the price of Brent oil per barrel was traded at $ 83.5 with a decrease of 0.3 percent. He said that sooner or later he would learn more about whether he was planning to raise the price, which brought attention to the meeting.
Despite starting the day with a rise in the domestic market, the BIST 100 index, which finished the day at 1,533.05 points with a 0.21% depreciation, by giving back its close gains due to the weak risk appetite globally, thus ended its upward streak that lasted for 10 uninterrupted trading days. Dollar/TL, on the other hand, is traded at 9.6030 at the opening of the interbank market today, after moving in the band of 9.46-9.62 yesterday.
Analysts said that before the FOMC decisions to be announced this evening, a selling trend was observed in Asian stock markets and US and European index futures, while a calm outlook prevailed in the foreign exchange and bond markets.
Analysts stated that the data agenda is also intense today, and that inflation in the country, private sector employment and factory orders in the USA, ADP private sector employment and factory orders abroad, the unemployment rate in the Euro Zone and the worldwide service sector PMI data will be followed. resistance reported that the 1.490 level is in the support position.
Economists participating in the AA Finans Inflation Expectation Survey expect the Consumer Price Index (CPI) to increase by 2.50 percent in October. According to the average of the economists' October inflation expectations (2.50 percent), it is calculated that annual inflation, which was 19.58 percent in the previous month, will rise to 20.01 percent. On the other hand, economists' year-end inflation expectations rose by 128 basis points to 19.30 percent compared to the previous survey.
The data to be followed in the markets today are as follows:
10.00 Turkey, October inflation
11.55 Germany, October service sector PMI
12.00 Eurozone, October service sector PMI
12.30 UK, October services sector PMI
13.00 Eurozone, unemployment rate for September
13.15 Speech by ECB President Lagarde
15.15 US, October ADP private sector employment
16.45 US, October services PMI
17.00 US, October ISM services PMI
17.00 US, factory and durable goods orders for September
21.00 Fed's interest rate decision
21.30 US, Fed Chairman Jerome Powell's press conference
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