After more than 3 years, the US Federal Reserve (Fed) increased the policy rate by 25 basis points to the range of 0.25-0.50 percent yesterday. While putting forward an "aggressive" plan against inflation, the bank pointed to 25 basis points increase for the 6 meetings to be held until the end of the year.
Raising its inflation forecast for this year from 2.6 percent to 4.3 percent, the bank also gave the message that the pace of interest rate hikes would be adjusted if needed.
Making evaluations after the decisions, Fed Chairman Jerome Powell said that they will look at the developing conditions and if they need to move faster in interest rate hikes, they will do so. Emphasizing that the economy is very strong and in a good position to cope with tighter monetary policy, Powell signaled that the reduction of the Fed's balance sheet of approximately $9 trillion could begin in May. Powell also stated that they still expect inflation to come down in the second half of the year. said.
Analysts said that the interest rate path revealed by the Fed softened significantly compared to the expectations before the Russia-Ukraine war, but considering the increasing uncertainties regarding the economies in the war environment, the rate hike signal was evaluated as a "hawk" at every meeting.
On the other hand, analysts said that the Fed is still optimistic about inflation and that the pricing shows that the bank can increase interest rates by 50 basis points at least once in the upcoming meetings.
After the Fed's meeting, it was seen that the exit from the bond markets accelerated yesterday, while the US 10-year bond yields were stabilized at 2.14% after testing the highest level since May 2019 with 2.25%. The dollar index, on the other hand, carried its decline to the 4th day and regressed to 98.4 levels. On the other hand, the New York stock market followed a buying trend yesterday, and the Dow Jones index rose 1.55 percent, the S&P 500 index rose 2.24 percent and the Nasdaq index increased 3.77 percent. It is seen that the new day started with a mixed course in US index futures contracts.
While the developments regarding the Russia-Ukraine war on the European side remain at the center of the agenda, the speech of the European Central Bank (ECB) President Christine Lagarde and the Bank of England's (BoE) interest rate decision are expected to have an impact on the direction of the markets. It is predicted that the BoE will raise interest rates by 25 basis points to 0.75 percent at today's meeting, thus returning to pre-pandemic rates.
In the European markets, where the inflation figures to be announced for February in the Eurozone will be followed closely, it was noteworthy that yesterday's pricing was on the positive side with the effect of falling oil prices. The DAX 30 index gained 3.76 percent in Germany, the FTSE 100 index gained 1.62 percent in the UK and the CAC 40 index gained 3.68 percent in France. While the euro/dollar parity is stabilizing at 1.10 levels with a decrease of 0.1 percent, it is seen that today's day starts mixed in index futures contracts.
On the Asian side, the expectations for the completion of the regulations on technology shares in China support the stock markets, while the rapid increase in the shares of Chinese technology companies traded in the Hong Kong stock exchange continues. On the other hand, the news that banks in Shanghai both reduced the interest rate for mortgage loans and shortened the approval process in the face of ongoing debt rollover problems in the real estate sector in China also supported the markets. With these developments, Shanghai composite index gained 2.2 percent in China, Nikkei 225 index gained 3.4 percent in Japan, and Hang Seng index in Hong Kong gained 6 percent close to the closing.
On the commodity side, although the International Energy Agency's oil demand decreased yesterday, it would not be enough to meet the supply cuts caused by the Russia-Ukraine war. .
Domestically, the BIST 100 index, which followed a positive course in Borsa Istanbul yesterday, finished the day at 2,088.80 points with an increase of 0.45 percent. Dollar/TL is traded at 14,6850 at the opening of the interbank market today, after closing at 14,6265 with a decrease of 0.4 percent yesterday.
Analysts stated that after the Fed's decisions, the search for direction in the markets came to the fore in the new day and a mixed course was followed, and said that today, in addition to the CBRT's Monetary Policy Committee meeting, BoE's interest rate decision and ECB President Christine Lagarde's statements are expected.
Analysts pointed out that the industrial production in the USA and the Consumer Price Index (CPI) in the Euro Zone came to the fore in today's data agenda, and noted that technically, the BIST 100 index was 1.950 support and 2.130 was resistance.
All economists surveyed by AA Finans predict that the policy rate will remain constant at 14 percent. The median of economists' year-end policy rate expectations was 14 percent.
The data to be followed in the markets today are as follows:
12.30 Eurozone, Speech by ECB President Lagarde
13.00 Euro Zone, CPI in February
14.00 Turkey, CBRT's interest rate decision
15.00 UK, BoE's interest rate decision
15.30 US, February housing starts
15.30 US, weekly jobless claims
15.30 US, March Philadelphia Fed Manufacturing Index
16.15 US, February industrial production and capacity utilization rate
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