Expectations regarding the monetary policies of the central banks of developed countries, especially the US Federal Reserve (Fed), remain at the center of the agenda in global markets. Although the increasing number of cases in the new type of coronavirus (Kovid-19) epidemic and the data pointing to the slowdown in the recovery in the economy increase the expectations that expansionary policies will continue, inflation, which continues its upward trend, forces central banks to take action.
An important part of the data, which the Fed takes into account the most in determining its policy, together with inflation, will be published today. Non-farm employment, unemployment and average hourly earnings data in the US employment report are expected to be determinative on the direction of the markets.
Analysts pointed out that the ADP private sector employment, announced the previous day, remained below expectations with 374 thousand, and the number of those who applied for unemployment benefits for the first time decreased to 340,000 in the week ending August 28, which has been recorded since March 14, 2020, when the Kovid-19 epidemic was felt intensely. It reminded me that it had dropped to its lowest level.
Stating that mixed signals from the data continue, analysts said that volatility in the markets may increase.
Before the employment report to be published today, a positive trend was observed in the New York stock market yesterday. Dow Jones index gained 0.37 percent, S&P 500 index gained 0.28 percent and Nasdaq index gained 0.14 percent, thus S&P 500 and Nasdaq indices broke their closing records.
On the European side, although the Producer Price Index (PPI), announced yesterday, markedly exceeded the expectations with an annual increase of 12.1 percent in July, increases were seen in the European stock markets.
Yesterday, the FTSE 100 index gained 0.2 percent in the UK, the DAX 30 index gained 0.1 percent in Germany and the CAC 40 index gained 0.06 percent in France. Euro/dollar parity, on the other hand, continued its upward trend and closed the day at 1.1876 with an increase of 0.3 percent.
The news that Japanese Prime Minister Suga Yoshihide will resign after increasing criticism in the fight against Kovid-19 in Asia brought politics to the focus of the agenda.
Prime Minister Suga said at a press conference that he would not participate in the intra-LDP leadership elections scheduled for September 29. Noting that he will announce his official statement to the public next week, Suga stated that the remaining mandate will be devoted to the government's fight against the new type of coronavirus (Kovid-19).
The Kyodo agency reported that Suga's official statement would be considered his "de facto resignation from his post." Despite the news of the resignation, the Nikkei 225 index in Japan rose close to 2 percent, while the Japanese yen depreciated by 0.1 percent against the dollar.
On the other hand, according to the data announced today, the Purchasing Managers Index of the service sector declined to 42.9 in Japan and 46.7 in China, pointing out that economic activity contracted in the service sector.
With these developments, Shanghai composite index decreased by 0.4 percent in China, while Kospi index increased by 0.7 percent in South Korea.
BIST 100 index in Borsa Istanbul, which followed a buying trend in the domestic market yesterday, finished the day at 1,479.12 points, gaining 0.34 percent value. Dollar/TL, on the other hand, closed at 8.2778 with 0.2 percent depreciation compared to the previous close, after seeing its lowest level since May 10 with 8.2625 yesterday. Dollar/TL is traded at 8.2920 at the opening of the interbank market today.
Analysts stated that today, the inflation in the country, the employment report in the USA abroad, retail sales in the Eurozone and the service sector PMI data to be announced worldwide will be followed, and noted that technically, 1.490 points in the BIST 100 index is resistance and 1.455 is support.
Economists participating in the survey conducted by AA Finans expect the Consumer Price Index (CPI) to increase by 0.72 percent in August. According to the average of economists' August inflation expectations (0.72 percent), it is calculated that annual inflation, which was 18.95 percent in the previous month, will decline to 18.78 percent. CPI increased by 1.80 percent in July compared to the previous month.
The data to be followed in the markets today are as follows:
10.00 Turkey, August CPI and Domestic PPI
10.55 Germany, August service sector and composite PMI
11.00 Eurozone, August services sector and composite PMI
11.30 UK, August services sector and composite PMI
12.00 Eurozone, July retail sales
14.30 Turkey, weekly money and bank statistics
15.30 US, August employment report
16.45 US, August services and composite PMI
17.00 US, ISM non-manufacturing PMI
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