While recession and inflation concerns continue to affect asset prices the announced macroeconomic data continues to be influential on the shaping of expectations.
While the profitability of the companies in the USA continued to exceed expectations in the balance sheet period, the stock markets continued to support the stock markets, while the signs of recession in the macroeconomic data and the expectations of the companies for the future periods eroded the risk appetite.
Yesterday, the number of first-time applications for unemployment benefits in the USA rose to 251,000 in the week ending on July 16 reaching an 8-month high. The Philadelphia Fed Manufacturing Index also fell to minus 12.3 in July the lowest level since May 2020.
In the bond markets the inverting yield curve for some assets continued to become evident feeding recession fears.
While the difference between the 10-year bond yield and the 2-year bond rate of the USA increased to 24 basis points for the first time in 22 years, the difference between the 10-year bond yield and 3-month treasury bills decreased to 50 basis points for the first time since August 2020.
Expectations regarding the USA Federal Reserve's (Fed) interest rate hike by 75 basis points at the meeting to be held next week continue.
While it is priced in the money markets that the Fed will increase interest rates by 75 basis points with a 70 percent probability in July, it is predicted that the bank will increase interest rates by 75 basis points with a 50 percent probability and by 50 basis points with a 33 percent probability at the September meeting.
With these developments, the S&P 500 index gained 0.99 percent, the Nasdaq index by 1.36 percent and the Dow Jones index by 0.51 percent in the New York stock market yesterday. Index futures contracts in the USA started the new day with a decrease.
Yesterday in Europe, the European Central Bank (ECB) hiked three key policy rates for the first time in 11 years.
Noting that they will implement the new TPI (Transitional Protection Instrument) according to the changing risks for the countries in the region, Lagarde said that the initiative regarding the use of the instrument will be solely with the ECB.
On the other hand, President Sergio Mattarella in Italy announced that early general elections would be held within 70 days by dissolving the parliament after the government crisis that resulted in the resignation of Prime Minister Mario Draghi.
The euro/dollar parity gained value with the decision of the ECB and is currently trading at 1.0190.
While DAX 30 index in Germany and FTSE MIB 30 index lost 0.71 percent in Germany, FTSE 100 index gained 0.09 percent in England and CAC 40 index gained 0.27 percent in France. Index futures contracts in Europe started the new day with a decrease.
While stock markets in Asia followed a mixed course, annual inflation in Japan fell to 2.4 percent in June.
While core inflation remained stable at 2.2 percent, the manufacturing industry Purchasing Managers Index (PMI) fell to 52.2 and the services PMI to 51.2.
While the new types of coronavirus (Kovid-19) cases on the Chinese side continue to affect the direction of the markets, concerns about economic activity continue to increase throughout the region.
With these developments, the Nikkei 225 index in Japan rose 0.50 percent close to the closing, while the Shanghai composite index in China decreased by 0.56 percent, the Hang Seng index in Hong Kong by 0.20 percent and the Kospi index in South Korea by 0.64 percent. .
The Central Bank of the Republic of Turkey (CBRT) kept the policy rate unchanged at 14 percent yesterday, while the BIST 100 index in Borsa Istanbul closed the day at 2,511.37 points with a decrease of 0.55 percent.
In the statement made by the ECB, the bank's refinancing rate increased from 0.00 percent to 0.50 percent, the interest rate paid for deposits held by banks at the central bank from -0.50 percent to 0.00 percent, and the marginal interest rate increased from -0.50 percent to 0.00 percent. It was reported that it was increased from 0.25 to 0.75 percent.
The ECB ended the negative interest rate period with its decision to increase interest rates above the expectations.
European Central Bank (ECB) President Christine Lagarde, in her statements after the meeting, stated that the risks for the European economy continued to be on the upside and that inflation started to spread over a wide area.
Dollar/TL, on the other hand, is trading at 17.73 at the opening of the interbank market today, after closing at 17.7143 with an increase of 0.6 percent yesterday.
Analysts stated that today the financial services confidence index in the country and the PMI data to be announced abroad in the USA and Europe will be followed, and stated that, technically, 2.550 points in the BIST 100 index is in the position of resistance and the level of 2.490 is in the support position.
The data to be followed in the markets today are as follows:
10.00 Turkey, July financial services confidence index
10.30 Germany, July manufacturing industry and service sector PMI
11.00 Eurozone, manufacturing and services PMI for July
11.30 UK, manufacturing and services sector PMI for July
16.45 US, July manufacturing and services PMI
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