Increasing investor sensitivity before all kinds of data and developments that may affect inflation and growth expectations cause volatility in the markets to remain high.
After the World Bank, the Organization for Economic Cooperation and Development (OECD) reduced its global economic growth forecast for this year from 4.5 percent to 3 percent yesterday, bringing recession concerns to remain on the agenda. While verbal guidance on inflation continues, US Treasury Secretary Janet Yellen said in her statement yesterday that an annual inflation rate of 8 percent is "unacceptable" for the United States.
With all these developments, before the ECB's meeting today, which is expected to give important signals about the monetary policy tightening roadmap, and the US inflation data for May, which will be announced tomorrow, the selling trend in the bond and share markets continued.
In this process, where the demand for the dollar remained strong, the pressure on commodities and other country currencies also increased. The dollar/yen parity tested 134.6, the highest level since February 2002. The barrel price of Brent oil also saw a 3-month high of 123.3 dollars, due to concerns that the epidemic measures will be lifted in China and production will be insufficient.
With these developments, the weakness continued in the New York stock market and a selling trend was followed. The Dow Jones index fell 0.81 percent, the S&P 500 index fell 1.08 percent and the Nasdaq index lost 0.73 percent. While the 10-year bond yield of the USA reached the highest level in about a month with 3.06%, the dollar index continued its movement at 102.5 levels.
On the European side, while the ECB is expected to take a hawkish stance at today's meeting, it is priced in the markets that the bank will raise interest rates by 75 basis points until September and will take the first step in July. According to the data released yesterday, the growth rate of the Eurozone for the first quarter was revised from 0.3 percent to 0.6 percent. Despite the positive revision, as the rise in energy prices triggered inflationary concerns, the DAX 30 index in Germany lost 0.76 percent, the FTSE 100 index in the UK by 0.08 percent, and the CAC 40 index in France by 0.80 percent. The recovery of the euro before the ECB decision also drew attention, and the euro/dollar parity, which rose by 0.1 percent yesterday, continued its course above 1.07 today.
According to the data released today on the Asian side, China's exports increased by 16.9 percent and imports by 4.1 percent on an annual basis in May, above the expectations. Despite the positive data, the news that epidemic measures will be implemented in the Minhang region of Shanghai, China, caused a decrease in risk appetite. With these developments, Shanghai composite index decreased by 0.8 percent in China, while Hang Seng index decreased by 0.5 percent in Hong Kong. The Nikkei 225 index rose 0.4 percent in Japan, which differed positively with the weakness of the yen supporting export companies.
Domestically, the BIST 100 index , which saw its historical peak with 2,684.77 points yesterday, went down with the sales that increased its effect at this level and closed the day at 2,540.36 points with a depreciation of 4.07 percent. Dollar / TL is traded at 17,1950 at the opening of the interbank market today, after closing at 17,1485 with an increase of 2.3 percent compared to the previous day.
Analysts said that volatility continues in the stock and bond markets before important data and developments that will shape growth and inflationary expectations.
Pointing out that the risk appetite in the markets has decreased as the rising bond yields and rising oil prices fueled inflation concerns, analysts stated that the weekly unemployment applications in the USA will be followed in addition to the ECB's interest rate decision.
Analysts stated that, technically, the BIST 100 index's 2.600 and 2.650 levels are in the resistance position, and the 2.500 and 2.440 points are in the support position.
The data to be followed in the markets today are as follows:
14.30 Turkey, weekly money and bank statistics
14.45 Eurozone, ECB's interest rate decision
15.30 Speech by Christine Lagarde, President of the ECB
15.30 US, weekly jobless claims
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