Yesterday, while the European Central Bank (ECB) increased policy rates by 75 basis points for the first time in its history, the message was given that the hawkish stance will continue until the fight against inflation is over.
Fed Chairman Jerome Powell also stated in his speech yesterday that they are strongly committed to reducing inflation, "We must continue until the job is done." made its assessment. Noting that the longer the inflation stays above the target, the greater the risk, Powell said that history strongly warned against the policy of early relaxation.
While following the statements of Powell as well as other Fed officials, Chicago Fed President Charles Evans stated that the bank is open to a 50 or 75 basis point rate hike at this month's meeting. Noting that he predicts the interest rate to rise to the range of 3.25-3.5 percent by the end of the year, Evans said that he expects it to reach 4 percent next year.
After the aforementioned statements, the probability that the Fed will raise interest rates by 75 basis points this month in pricing in money markets increased to 84 percent. It is estimated that the Fed will increase interest rates by 25 basis points with an 82 percent probability at its meeting in November.
The decrease in the uncertainties in the monetary policy roadmap increased the risk appetite, while the dollar index fell to 108.8, the lowest level since the beginning of September.
While commodity prices find support with the weakening dollar, the barrel price of Brent oil is trading at $89.5 with an increase of 1.9 percent in the new day, while the price of gold is trading at $ 1,721 with an increase of 0.8 percent.
With these developments, the S&P 500 index rose by 0.66 percent, the Nasdaq index by 0.60 percent and the Dow Jones index by 0.61 percent in the New York stock market yesterday. Index futures contracts in New York stock market continue their buying weighted course on the new day.
In Europe, the ECB increased the refinancing rate to 1.25%, the deposit rate to 0.75% and the marginal funding rate to 1.50%, with an increase of 75 basis points yesterday.
The bank raised its Eurozone growth forecast for 2022 from 2.8 percent to 3.1 percent. It also cut its growth forecast for the next year from 2.1 percent to 0.9 percent.
ECB President Christine Lagarde, in her statement after the meeting, noted that the ECB is not at a "neutral" level in interest rates, but is moving towards there, adding, "We are far from the level that will return inflation to 2 percent." used the phrases.
Stating that it will take more than 2 meetings but less than 5 meetings to end the rate hikes, Lagarde said, "The next rate hike doesn't have to be 75 basis points, this is not the rule." he said.
“The depreciation of the euro also contributed to increasing inflationary pressures,” Lagarde said. said.
On the other hand, it is considered certain that the ECB will increase the policy rate by 75 basis points in the October meeting.
After ECB's steps and Lagarde's speech, the euro/dollar parity was stabilized at 1.0070, 0.7 percent above the previous close, after seeing its highest level since August 26 in the new day.
On the other hand, after the death of Queen Elizabeth II yesterday at the age of 96, her 73-year-old son Charles took the throne and became the King of England.
With these developments, the DAX 40 index lost 0.09 percent in Germany yesterday, while the FTSE 100 index in the UK and the CAC 40 index in France rose by 0.33 percent, while the FTSE MIB 30 index in Italy rose by 0.88 percent. In Europe, index futures contracts started the new day with rising.
In Asian stock markets, a positive trend stands out with the expectations that the inflation that fell below expectations in China this morning gives the People's Bank of China (PBoC) policy space to support the economy.
According to the macroeconomic data announced in the region, the Consumer Price Index (CPI) and the Producer Price Index (PPI) rose by 2.3 percent in August in China.
On the other hand, the Japanese yen, which is at the peak of the last 24 years, continues to disturb the authorities. Japanese Finance Minister Suzuki Shunichi stated that the latest movements of the yen are "far from the fundamental stability of the economy".
"We are very worried about the sudden fluctuations, which are against us. We are ready to take the necessary measures without excluding any options," Suzuki said. said. Describing the downward trend as "speculative", Suzuki reiterated that they would intervene as the Japanese government if this trend continued.
The dollar/yen parity, which declined, albeit limited by the retreat in the dollar, is at the level of 142.8 with a decrease of 1 percent in the new day.
With these developments, the Nikkei 225 index in Japan gained 0.60 percent, the Shanghai composite index in China gained 0.65 percent and the Hang Seng index in Hong Kong gained 2.42 percent.
Domestically, Borsa İstanbul share market continued to record records yesterday.
Yesterday, the BIST 100 index completed the day at 3,437.41 points with an increase of 1.02 percent, reaching the highest daily close of all time, while bringing its highest level record to 3,505.65 points.
Dollar/TL is trading at 18.2370 at the opening of the interbank market today, after closing at 18.2312 with a flat course yesterday.
Analysts stated that the data agenda is calm in the country today, and that, in addition to the speeches of Fed members abroad, wholesale stocks will be followed in the USA, and said that technically, 3,500 points in the BIST 100 index are resistance and 3.380 and 3.330 levels are support.
The data to be followed in the markets today are as follows:
17.00 US, July wholesale stocks