While the volatility in global markets is high due to inflation concerns, faster tightening expectations in monetary policies, the rise in bond interest rates and increasing geopolitical risks, today the interest rate decision of the Central Bank of the Republic of Turkey (CBRT) in Turkey and the European Central Bank (ECB) meeting minutes abroad are intense. data agenda will be followed.
While the expectations that the central banks will tighten their monetary policies more rapidly continue to affect the investor risk perception negatively, the increasing tension between Russia, the USA and NATO due to Ukraine remains at the center of the agenda.
With the effect of the increase in geopolitical risks, the price of Brent oil per barrel is trading at $87.7 today, after seeing the highest level since October 2014 with $88.4 a barrel yesterday. On the other hand, the upward movement in interest rates continues in the bond market as inflation concerns and uncertainties regarding economic activity persist. While the US 10-year bond yield tested 1.90 percent yesterday, seeing the peak of 2 years, the 10-year bond yields in Germany turned positive for the first time since May 7, 2019. The rapid rise in long-term bond yields in Spain, France and Italy was also noteworthy.
US Morgan Stanley's net profit increased by 9 percent in the last quarter of last year to $ 3.7 billion. In the same period, Bank of America's net profit rose 28 percent to $ 7 billion. After the better-than-expected bank balance sheets, the indices in the New York stock market, which started the day with an increase, turned negative with the sales increasing their effect towards the end of the day. The Dow Jones index fell 0.96 percent, the S&P 500 index fell 0.97 percent and the Nasdaq index fell 1.15 percent to complete the day. The dollar index, on the other hand, is flat today after completing the day at 95.5 with a decrease of 0.2 percent yesterday.
On the European side, stock-based movements came to the fore with the company's balance sheets exceeding expectations yesterday, while rising bond yields created selling pressure in the stock markets. December inflation data announced yesterday in the UK and Germany also pointed to the highest level of the last 30 years. After this development, Bank of England (BoE) Governor Andrew Bailey stated that high natural gas prices are a cause for concern and that the inflation pressure may continue until the end of 2023, while expectations that the bank will increase interest rates by 25 basis points at its meeting on February 3 after the announcement strengthened.
With these developments, although a positive course was observed in the European stock markets, excluding Italy, it was noteworthy that the gains of the indices exceeding 1 percent during the day decreased close to the closing due to the negative atmosphere in the US stock markets. DAX 30 index gained 0.24 percent in Germany, FTSE 100 index gained 0.35 percent in England and CAC 40 index gained 0.55 percent in France. After closing at 1.1346 with an increase of 0.2 percent yesterday, the euro/dollar parity is on a horizontal course today.
In Asia, the People's Bank of China (PBoC) added a new one to the steps it took to support the economy, while lowering the 1-year loan reference rates, which is the closest to qualifying as the policy rate, from 3.80 percent to 3.70 percent in line with the expectations. While the bank has also reduced the 5-year loan interest rate, which is effective in mortgage pricing, from 4.65% to 4.60%, it is stated that this discount, which is below expectations, will bring some relief, albeit limited, to the real estate sector, which is currently experiencing liquidity difficulties.
In the face of debt problems in the real estate sector, the PBoC reduced its 1-year LPR for the first time in 19 months last month. The bank also reduced the interest rate on one-year loan and seven-day reverse repo agreements by 10 basis points on Monday.
Analysts stated that the interest rate decision to be issued by the CBRT's Monetary Policy Committee (PPK) meeting in Turkey and changes in the decision text will be determinative on the direction of the markets. reported that the industry index will be followed.
Analysts stated that technically, 2.050 levels are in the resistance position in the BIST 100 index, and 1.970 and 1950 points are in the support position.
All economists participating in the survey conducted by AA Finans predict that the policy rate will remain constant at 14 percent.
The data to be followed in the markets today are as follows:
10.00 Germany, December PPI
13.00 Euro Zone, CPI for December
14.00 Turkey, CBRT's interest rate decision
15.30 Europe, ECB's December meeting minutes
16.30 US, weekly jobless claims
16.30 US, January Philadelphia Fed Manufacturing Index
18.00 USA, second hand home sales in December
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