In global markets, the Omicron variant, inflationary pressures and the concerns that the normalization in monetary policies will take place faster than expected, as well as the search for direction after macroeconomic data that gave mixed signals, came to the fore. Unemployment rate and Producer Price Index (PPI) will be followed.
Concerns about the Omicron variant and its effects on growth in the new type of coronavirus (Kovid-19) epidemic continue to be decisive on the direction of the markets.
In an environment where there is a consensus that the rise in inflation will take longer than expected, uncertainties about the impact of the new variant, which emerged on monetary policies, are getting stronger. The mixed signals of macroeconomic data, which is an important determinant at this point, also complicates investor pricing.
Experts stated that time is needed to clearly understand the effectiveness of the vaccines on the new variant and that there should be no panic, while the perception of risk increased with the first case seen in the USA yesterday.
Answering questions from members of the Financial Services Committee of the US House of Representatives, US Federal Reserve (Fed) Chairman Jerome Powell reiterated that the assessment that inflation is expected to last until the second half of 2022 and that it is "temporary" should be abandoned. Stating that the risk of permanent high inflation has clearly increased, Powell said, "I think our policy has adapted to this and will continue to provide it. We will use our tools to prevent this high inflation we are experiencing from becoming permanent." said.
In the November issue of the Beige Book report, which includes the Fed's assessments of the current situation in the American economy, risks regarding inflation were also pointed out. While it was stated in the report that the US economy grew at a moderate to moderate rate, it was emphasized that companies were struggling with price increases and labor shortages, and wide-ranging input cost increases were experienced.
On the macroeconomic data side, the Supply Management Institute (ISM) manufacturing index in the USA increased by 0.3 points to 61.1 in November compared to the previous month. The November manufacturing industry Purchasing Managers Index (PMI), announced by IHS Markit, was also revised from 59.1 to 58.3. Private sector employment in the country increased by 534 thousand people in November, exceeding market expectations.
With these developments, there was a sharp decline in the New York stock market yesterday, led by travel stocks. The Dow Jones index fell 1.34 percent, the S&P 500 index fell 1.27 percent and the Nasdaq index lost 1.83 percent. The dollar index, which moved in the narrow band of 95.6-96.2 yesterday, is just below 96 today. The US 10-year bond yield continued to decline and stabilized at 1.43 percent after seeing its lowest level in 1.5 months with 1.4080 percent. Despite the news that US President Joe Biden is working on the strategy of combating Kovid-19 for the winter months and that the measures can be increased, it is noteworthy that the new day started positively on the side of index futures contracts.
According to the data announced yesterday on the European side, retail sales in Germany decreased by 0.3 percent in October, despite the expectations of a 1 percent increase. November manufacturing industry PMI in the country decreased by 0.4 points compared to the previous month and decreased to 57.4 due to the slowdown in factory activities. The aforementioned data continued to expand with 58.1 in the UK, and in the Eurozone, with 58.4, which was below the expectations, it recorded a limited increase of 0.1 points compared to the previous month. Following the data, FTSE 100 index gained 1.55 percent in England, DAX 30 index gained 2.47 percent in Germany, CAC 40 index gained 2.39 percent in France and FTSE MIB 30 index gained 2.16 percent in Italy. After closing at 1.1311 with a decrease of 0.2 percent yesterday, the euro/dollar parity remains flat today. European index futures contracts started the day with a mixed course.
On the Asian side, measures were increased after the first case of the Omicron variant was seen in Japan yesterday, while the Bank of Japan (BoJ) stated that they would act cautiously against the risks posed by the new variant on the economy and financial markets.
With these developments, a mixed course was observed in Asian stock markets close to the close. While the Nikkei 225 index depreciated by 0.4 percent in Japan near the closing, the Kospi index in South Korea rose by 1.1 percent. Shanghai composite index in China is flat.
On the commodity side, the ounce price of gold, which ended its two-day decline yesterday with Omicron concerns, is moving sideways today, after closing at $1,779 with an increase of 0.4 percent. The barrel price of Brent oil, which closed at $68.4 with a decrease of 1.7 percent yesterday, is trading at $69.2 today.
Records were broken in Borsa Istanbul yesterday with the upward revision of Turkey's growth expectations by international organizations. While the BIST 100 index increased by 2.64 percent yesterday, closing the highest of all time with 1,857.40 points, it carried its historical peak to 1,857.83 points.
Credit rating agency Standard & Poor's (S&P) revised its growth expectation for Turkey from 8.6 percent to 9.8 percent for 2021, and from 3.3 percent to 3.7 percent for 2022. The Organization for Economic Cooperation and Development (OECD) also increased Turkey's 2021 growth forecast, which was previously announced as 8.4 percent, to 9 percent. OECD revised its growth forecast for Turkey for the next year to 3.3 percent by increasing it by 0.2 points.
Analysts said that the news flow on Kovid-19 will continue to be decisive on the direction of the markets.
Stating that the messages to be given by the CBRT at the investor meeting today will be at the center of the markets, analysts stated that export figures, weekly money and bank statistics in the country, Producer Price Index (PPI) in the Euro Area and weekly unemployment applications in the USA will be followed abroad.
Analysts stated that technically, the BIST 100 index is at the level of 1.860 as resistance and 1.790 points as support.
The data to be followed in the markets today are as follows:
13.00 Euro Zone, October PPI and unemployment rate
14.30 Turkey, weekly money and bank statistics
16.30 US, weekly jobless claims
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