While the developments regarding the Russia-Ukraine war continue to be the main risk factor shaping the pricing, the expectations that the USA and Western countries will announce new sanctions against Russia increase the risk perception.
While this situation continues to feed inflationary concerns, the exit from the bond market accelerated with the "hawk" statements from the Fed officials on the central banks front, and the dollar index gained strength.
Lael Brainard, one of the Fed Managers, said that there may be a further rise in inflation, which requires a faster rate hike. Pointing to the upside risks in inflation, Brainard said, "Fed will continue to tighten its monetary policy regularly to reduce inflation. The balance sheet will be reduced rapidly as of the May meeting." said. Esther George, President of the Kansas City Fed, stated that it would be an option for the Fed to increase interest rates by half a point in May. " used the expressions.
Following the statements that pointed out that rapid interest rate hikes could be accompanied by the balance sheet reduction process at the May meeting of the bank, the US 10-year bond yield increased from 2.38 percent and tested 2.63, the peak of the last 3 years. The dollar index, on the other hand, continued its upward movement for the 4th consecutive trading day and rose to 99.6, the highest level it has seen since May 2020.
On the commodity side, although increasing geopolitical risks kept the upward pressures on prices alive, oil and metal prices decreased due to the strengthening of the dollar and the extension of the quarantine period implemented in Shanghai, China, within the scope of the new type of coronavirus (Kovid-19) epidemic. After rising to 109 dollars yesterday, the price of Brent oil per barrel was below $105 with the rise of demand-side concerns, while it was stabilized at 106.2 dollars today. On the other hand, the ounce price of gold decreased from $ 1,945 to $ 1,916.
With these developments, a sales-weighted course was also observed in the New York stock market yesterday, with the Dow Jones index declining by 0.80 percent, the S&P 500 index by 1.26 percent and the Nasdaq technology index by 2.26 percent. US index futures contracts are followed by a selling trend ahead of the minutes of the FOMC's meeting held on March 15-16, which will be announced today.
Analysts said that in the minutes, clues will be sought on the path to be followed for interest rate hikes and balance sheet reduction at the May meeting. Analysts stated that there is an 80 percent probability that the Fed will increase interest rates by 50 basis points in May, and that the volatility in the markets may accelerate with the increase in the said probability.
On the European side, the focus of the agenda is how the new sanctions against Russia will affect energy prices. In the region, where inflationist concerns persist, it is observed that the sensitivity of the stock markets to developments has increased. While the DAX 30 index decreased by 0.65 percent in Germany and the CAC 40 index decreased by 1.28 percent in France yesterday, the FTSE 100 index increased by 0.72 percent in the UK. With the strengthening in the dollar, the euro/dollar parity carried its decline to the 5th day and reached its lowest level in a month with 1.0891. Index futures contracts in Europe also started the new day with a decline.
On the Asian side, the results regarding the reflection of the restriction measures taken in the region on the economies in the face of the increasing number of Kovid-19 cases began to be announced. According to the data released today in China, the Purchasing Managers' Index (PMI) of the services sector, decreased by 10 points compared to the previous month to 42 in March, recording the fastest contraction in 2 years. After a two-day holiday following this development, the Shanghai composite index in China, which opened for trading today, is close to the closing, with a decrease of 0.2 percent, the Nikkei 225 index in Japan by 1.4 percent and the Hang Seng index in Hong Kong with a decrease of 1.2 percent.
Domestically, the BIST 100 index in Borsa Istanbul completed the day with a 0.64 percent gain in value, bringing the closing record to 2,326.29 points. Dollar/TL, on the other hand, is flat at the opening of the interbank market after closing at 14.7196 with an increase of 0.2 percent yesterday.
Analysts stated that a volatile course prevailed in the global stock markets due to the ongoing uncertainties regarding the Russia-Ukraine war and increasing inflationary pressures, and stated that Borsa Istanbul is positively differentiated.
Emphasizing that the activity in the bond and commodity markets should also be carefully monitored, analysts said that the minutes of the Fed's May meeting, which will be announced today, are of critical importance in this context.
Analysts stated that factory orders in Germany and the Producer Price Index (PPI) in the Euro Zone are on the agenda of today's data, and that technically, 2,290 points in the BIST 100 index are support and 2,400 levels are resistance.
The data to be followed in the markets today are as follows:
09.00 Germany, factory orders for February
12.00 Euro Zone, February Producer Price Index (PPI)
21.00 USA, FOMC meeting minutes
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