Concerns about the Omicron variant in the COVID-19 outbreak continue to weigh on the stock markets. While some studies show that the protection rate of over 80 percent against other variants of Kovid-19 in vaccines has decreased significantly in Omicron, the US pharmaceutical company Pfizer announced that the antiviral drug developed against Omicron is 89 percent effective. The World Health Organization (WHO) also warned that the fact that Omicron shows milder symptoms compared to other variants does not mean that the epidemic will end and that one should be alarmed.
Although the news flow about the course of the epidemic continues to be at the top of the agenda, the focus of investors is on the decisions that will come out of the Fed's Open Market Committee (FOMC) meeting, which started yesterday, and Powell's statements afterwards.
Analysts said that the Fed is not expected to change interest rates, but said that the bank may accelerate the reduction in bond purchases announced last month in the face of inflation reaching its highest level in nearly 40 years and record producer prices.
At the last meeting of the year, when the issue of verbal guidance gained more importance, analysts emphasized that it would be critical whether Powell would maintain his hawkish stance and give a clue about the 2022 interest rate path, and noted that decisions and statements could increase the volatility in the markets.
On the macroeconomic data side, the Producer Price Index (PPI), which was announced in the USA yesterday, increased by 0.8 percent monthly in November, while it reached a record level with an annual increase of 9.6 percent. While continuing supply constraints were effective in the rise in PPI, inflation concerns and expectations of a faster tightening in monetary policies after the data brought sales to the New York stock market. The Dow Jones index fell 0.30 percent, the S&P 500 index fell 0.75 percent and the Nasdaq index lost 1.14 percent. In the bond market, which is dominated by an unstable course, the 10-year bond interest rate of the USA is flat today, after closing at 1.44 percent yesterday. The dollar index, which tested the highest level of the last week with 96.6 yesterday, is also moving sideways with 96.5 today. It is seen that the index futures contracts of the USA started the new day positively before the Fed.
On the European side, forward natural gas contracts, which started to rise again with the news that the Nord Stream 2 Natural Gas Pipeline may not be able to obtain an operating license, exceeded 120 euros yesterday. In addition to the increase in natural gas prices, which triggered inflation concerns, the concerns about the increasing number of Kovid-19 cases brought sales to the stock markets, led by technology stocks. With these developments, although the industrial production in the Euro Zone increased by 3.3 percent annually in October, above the expectations, the DAX index in Germany was 1.08 percent, the FTSE 100 index in the UK was 0.18 percent and the CAC 40 index in France was 0 percent. decreased to .69. After closing at 1.1255 with a decrease of 0.3 percent yesterday, the euro/dollar parity is on a horizontal course today. European index futures contracts, on the other hand, started the new day with buyers before the Fed.
On the Asian side, while debt rollover problems in China and the statements of policy makers continue to occupy the agenda, industrial production in the country exceeded expectations with an annual increase of 3.8 percent in November, according to the data released today. In the same period, retail sales in China fell by 3.9 percent, falling short of market forecasts. On the other hand, in the face of the developments in the economy, the People's Bank of China injected 500 billion yuan of liquidity into the market through medium-term loans.
With these developments, a mixed course was observed in Asian stock markets before the Fed's interest rate decision. Close to the closing, Shanghai composite index in China decreased by 0.1 percent and Hang Seng index in Hong Kong decreased by 0.2 percent, while Nikkei 225 index in Japan increased by 0.1 percent.
Domestically, the BIST 100 index in Borsa Istanbul gained 2.68 percent and closed at the all-time high with 2,157.74 points. Dollar/TL, on the other hand, is trading at 14,4550 at the opening of the interbank market today, after closing at 14,3986 with an increase of 4.1 percent yesterday.
Analysts said that concerns about inflationary pressures and the Omicron variant remain on the agenda, and that a cautious course can be followed in global stock markets before the Fed's interest rate decision and projections for the economy.
Stating that the data agenda is calm in the country today, and that retail sales will be followed with the New York Fed activity index in the USA abroad, analysts said that technically, 2,200 and 2,250 points in the BIST 100 index are resistance and 2.070 levels are support.
The data to be followed in the markets today are as follows:
10.00 UK, November CPI and PPI
11.00 Turkey, November budget balance
16.30 US, December New York Fed Activity Index
16.30 US, November retail sales
22.00 USA, Fed's interest rate decision
22.30 US, Fed Chairman Powell's speech
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