The continuation of the spread of the Omicron variant in the new type of coronavirus (Kovid-19) epidemic and the tightening of the measures in parallel with the countries cause the concerns about economic growth to increase day by day. In an environment where there is a consensus that the rise in inflation will last longer than expected, statements from monetary policy makers pointing out that fiscal incentives can be terminated more quickly continue to come. In an environment where growth and inflation concerns strengthen together, investors shape their expectations regarding the course of monetary policies with macroeconomic data, and focus on non-farm employment, unemployment rate and average hourly earnings data included in the US employment report today.
Before the data in question, US President Joe Biden announced his plan to combat the epidemic yesterday and warned to be prepared for the increase in cases in the coming weeks. The White House also announced that a new regulation for international travel will come into effect from next week after the Omicron variant was found in the country.
After Fed Chairman Jerome Powell, who has been making hawkish statements about monetary policies since the beginning of the week, Treasury Secretary Janet Yellen said yesterday that she is ready to remove the word "temporary" for inflation in the US. Yellen also pointed out that lowering some tariffs on goods imported from China may alleviate price pressures, adding, "Some tariffs introduced during the former US President Donald Trump administration do not have a real strategic rationale and create problems. I think the tariffs contribute to higher prices in the US. " said. These statements of Yellen were interpreted as the risk perception on the geopolitical side in terms of relations between the two countries may decrease in the future.
On the macroeconomic side, the number of first-time applications for unemployment benefits in the US increased by 222,000 last week, below market expectations. Despite the increase in question, the data, which was close to the pre-pandemic average, confirmed the ongoing recovery in the labor market.
On the other hand, the US Senate approved the interim budget bill that would prevent the federal government from shutting down. While there is very little time left before the temporary budget, which was adopted on September 30, when the 2021 fiscal year ends in the country, the bill passed by the House of Representatives and the Senate will enter into force after the signature of US President Joe Biden.
With these developments, a positive trend was observed in the New York stock market yesterday. The Dow Jones index gained 1.82 percent, the S&P 500 index gained 1.42 percent and the Nasdaq index gained 0.83 percent. The dollar index, which moved in the narrow band of 95.8-96.2 yesterday, continues its horizontal course with 96.2 today. After falling to the lowest level in 1.5 months with 1.4080 percent yesterday, the US 10-year bond yield started to rise and closed the day at 1.46 percent, and today it is at the level of 1.43%. US index futures contracts started the new day mixed.
On the European side, a negative course was observed in the stock markets, led by the sharp decline in technology stocks yesterday. The European Union (EU) Public Health Agency's warning that the Omicron variant could exceed more than half of all Kovid-19 cases in Europe in the next few months was also effective in the decline in the indexes. While the unemployment rate in the Euro Zone was announced as 7.3 percent in October in line with the expectations, with these developments, the FTSE MIB 30 index was 1.39 percent in Italy, the DAX 30 index was 1.35 percent in Germany, the CAC 40 index was 1% in France, 25 and the FTSE 100 index in the UK fell 0.55 percent. After moving in the narrow band of 1.1290-1.1310 yesterday, Euro/dollar parity continues its horizontal movement just below 1.13 today. On the European index futures side, it is noteworthy that the new day started off mixed.
In the face of the increasing number of cases in Asia, the tightened measures, especially in Japan, remain at the focus of the agenda, while the hard sales in Chinese technology stocks seem to put pressure on the Hong Kong stock market. On the data side, the service sector Purchasing Managers Index (PMI) rose 2.3 points to 53 in November compared to the previous month in Japan, and fell to 52.1 in China, down 1.7 points. With the effect of mixed data, Asian stock markets followed an unstable course, while the Nikkei 225 index in Japan increased by 0.4 percent and the Shanghai composite index in China increased by 0.6 percent, while the Hang Seng index in Hong Kong decreased by 0.7 percent.
On the commodity side, the barrel price of Brent oil, which saw the lowest level in 2.5 months with $ 65.7 yesterday, started to rise with the news that the Organization of Petroleum Exporting Countries (OPEC) and OPEC + group, which consists of some non-OPEC producer countries, may discuss halting the oil production increase for January. While testing the dollar, it is trading at $ 70.6 today. On the other hand, the ounce price of gold, where volatility has been high since the beginning of the week, found buyers at $ 1,773 with an increase of 0.3 percent, after closing at $ 1,768 with a decrease of 0.6 percent yesterday.
Analysts stated that the new day started with a mixed course with concerns about the course of inflation, growth and monetary policies, and said that today's intense data agenda, especially the inflation in the country and the employment report in the USA, will be determinative on the direction of the markets.
Stating that the news flow regarding Kovid-19 will be at the center of the markets with the statements of the European Central Bank (ECB) President Christine Lagarde, the analysts also stated that the evaluation of Turkey by the international credit rating agency Moody's, which is expected to be published after the markets close today, is expected.
Fitch Ratings raised its growth expectation for this year from 9.2 percent to 10.5 percent, and its growth forecast for 2022 from 3.5 percent to 3.6 percent, in the Turkey assessment it published off the calendar yesterday. In the statement, which stated that Turkey's credit rating was confirmed as "BB-", it was noted that the country's credit rating outlook was changed from "stable" to "negative".
Analysts stated that technically, 1.890 and 1.920 levels in the BIST 100 index are in the resistance position and 1.790 points are in the support position.
Economists participating in the AA Finance survey expect the Consumer Price Index (CPI) to increase by 2.88 percent in November. According to the average of economists' November inflation expectations (2.88 percent), it is calculated that annual inflation, which was 19.89 percent in the previous month, will rise to 20.57 percent.
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