While the global markets followed a mixed course with the concerns about inflation and the expectations of stronger tightening in monetary policies in parallel, the September balance of payments data in Turkey and the UK's third quarter growth abroad will be followed today.
Yesterday, the Consumer Price Index (CPI) in the USA exceeded the expectations with a monthly increase of 0.9 percent in October, and showed the highest increase in 31 years with 6.2 percent on an annual basis. In China, the Producer Price Index (PPI), which calculates the ex-factory prices of manufacturing products, was 13.5 percent in October, the highest level in 26 years.
The data pointing out that high levels of inflation are maintained, although giving the message that "we will be patient" in interest rate hikes, weakened the US Federal Reserve's (Fed) hand in a stronger tightening in monetary policies. While this situation caused the profit sales that started the previous day in the stock markets to deepen, the risk perception was relatively calmed after the statements of US President Joe Biden and Treasury Secretary Yellen.
Biden, in his statement regarding the data, stated that reversing the inflation trend is the top priority and stated that he asked the National Economic Council to work on reducing energy prices and the Federal Trade Commission to take action against market manipulations in the energy sector. Yellen, on the other hand, said that the US Federal Reserve (Fed) will not allow the repetition of the period of high inflation as in the 1970s, and that it will take action if necessary.
Analysts stated that the amount of reduction in monthly bond purchases, which the Fed announced as $15 billion and stated to be subject to change, could be increased for the next period, and this could also push the interest rate hike calendar forward, adding that the verbal guidance of policy makers would be followed carefully.
With these developments, a sales-weighted course was followed in the New York stock market yesterday, while the Dow Jones index depreciated by 0.66 percent, the S&P 500 index by 0.82 percent and the Nasdaq index by 1.66 percent. While the 10-year bond yield of the USA increased from 1.44 percent yesterday to 1.58 percent with increasing inflation data, it follows a horizontal course at 1.55 percent today. After seeing 94.9 for the first time since July 2020 with an increase of 0.9 percent yesterday, the dollar index continued its rise today and tested 95, which analysts described as critical resistance. In the index futures contracts of the USA, it is seen that the new day started with a mixed course.
Despite the increasing inflationary concerns on the European side and the daily number of new types of coronavirus (Kovid-19) cases in Germany reaching the highest level since the beginning of the epidemic, there was an increase in the stock markets. The FTSE 100 index gained 0.91 percent in the UK, the DAX 30 index gained 0.17 percent in Germany, the CAC 40 index gained 0.03 percent in France and the FTSE MIB 30 index gained 0.44 percent in Italy. Euro/dollar parity, after nearly 16 months, fell below 1.15 yesterday and is at 1.1480 today. Index futures contracts in Europe, on the other hand, are following a mixed course today.
On the Asian side, different allegations were made as to whether the Chinese real estate company Evergrande, which was in the debt crisis, paid the interest of foreign debt bonds, which was due in October but could not pay, within the 30-day tolerance period, which expired yesterday. A bondholder and clearinghouse confirmed that the company had paid $148.1 million in interest on three foreign debt bonds that were due, while different sources suggested the company was in default. No official statement has been made on the matter until now.
The Chinese government's announcement that real estate companies are easing refinancing restrictions has bolstered equity markets. While the shares of Evergrande traded on the Hong Kong stock exchange increased by more than 5 percent, the Shanghai composite index in China and the Nikkei 225 index in Japan gained 0.6 percent near the closing. In South Korea and Hong Kong stock exchanges, a selling trend is observed, albeit limited.
On the commodity side, the barrel price of Brent oil closed at $82.1 with a decrease of 2.7 percent yesterday, while it is moving sideways at $82 today. The ounce price of gold, on the other hand, is at the level of $ 1.850 today, after seeing the highest level in 5 months with $ 1,868.5 yesterday due to increasing inflationary concerns.
In the domestic market, the BIST 100 index in Borsa Istanbul completed the day with a 0.52 percent value increase, bringing the closing record to 1,624.09 points. Dollar/TL, on the other hand, reached its historical peak of 9.88 at the opening of the interbank market today, after closing at 9.8434 with an increase of 1.1 percent yesterday.
Analysts stated that the expectations of an earlier tightening by the central banks in the face of increasing inflationary pressures put pressure on the stock markets, and said that the positive divergence in Borsa Istanbul attracted attention.
Analysts noted that the importance of balance of payments data increased after the statements of the Central Bank of the Republic of Turkey Chairman Şahap Kavcıoğlu last month, and that the data for September, which will be announced today, will be in the focus of investors.
Mentioning that the growth and industrial production data to be announced in the UK will also be followed, the analysts stated that the BIST 100 index, technically, is at the level of 1.640 as resistance and 1.570 points as support.
Economists participating in the survey conducted by AA Finans expect the current account to yield a surplus of 1 billion 420 million dollars in September. Economists estimate that the current account will have a deficit of 17 billion 950 million dollars by the end of 2021.
The data to be followed in the markets today are as follows:
10.00 Turkey, September balance of payments
10.00 England, September industrial production
10.00 UK, 3rd quarter growth
14.30 Turkey, weekly money and bank statistics
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