While it is seen that the pricing of assets, which are between recession and inflation concerns, has become difficult, the verbal guidance of the US Federal Reserve (Fed) officials is effective in this situation.
Fed Board Member Christopher Waller said on Friday that monetary policy will need to remain tight for longer than markets expect, adding that substantial credit tightening may reduce the need for rate increases, but real-time judgment is compelling.
Atlanta Fed President Raphael Bostic, arguing that although the latest inflation data are encouraging, prices are still rising too fast, and that the Fed should do more and that the bank can stop and evaluate the situation after raising interest rates once again.
Chicago Fed President Austan Goolsbee said that the latest retail sales and producer inflation data show that they are on the right track and that there is a possibility of recession.
After these developments, the probability of the Fed’s next 25 basis point rate hike exceeded 80% in the pricing in the money markets, and there was a change in the expectations for the June meeting.
Accordingly, while it is estimated that the bank will keep the interest rates constant in June with a 64 percent probability, the predictions that it can increase interest rates by 25 basis points rose to 21 percent.
As the balance sheet season started with banks in the USA on Friday, investing in the focus, the company’s financial results are expected to increase the volatility by stock and sector.
Net profits of JPMorgan Chase, Citigroup and Wells Fargo increased in the first quarter of this year, driven by higher interest rates despite the banking sector’s woes.
While the balance sheet season is expected to warm up this week with companies such as Bankf of America, Goldman Sachs, Charles Schwab, Netflix and Tesla, the signals regarding the US economy are also important in the company financials to be announced.
With these developments, the dollar index ended the three-day downward trend on Friday and rose by 0.6 percent, and started the new week at 101.7 level, 0.1 percent above the previous closing.
After the price of gold fell to $ 2.004 with a loss of value by 1.8 percent on the last trading day of last week, it is currently 0.3 percent above the previous closing at $2,010.
With these developments, the S&P 500 index fell by 0.21 percent, the Dow Jones index by 0.42 percent and the Nasdaq index by 0.35 percent in the New York stock market on Friday. Index futures contracts in the USA started the new week with a limited rise.
While European stock markets increased their upward trend for 5 consecutive days on Friday, expectations regarding the monetary policy of the European Central Bank (ECB) are getting clearer day by day.
Following the downward trend in the region, the ECB is expected to complete this cycle by raising interest rates by 25 basis points in the next three meetings.
With these developments, DAX 40 index rose 0.50 percent in Germany, FTSE 100 index rose 0.36 percent in England, CAC 40 index rose 0.52 percent in France and MIB 30 index rose 0.89 percent in Italy. Index futures contracts in Europe started the new week with a rise.
Although Asian stock markets started the new week cautiously, risk appetite seems to have recovered in the later hours of the session.
Today, the People’s Bank of China (PBoC) did not change its 1-year lending rate, making its lowest funding since November with 170 billion yuan. Analysts said that despite the decrease in the amount of funding, this indicates a credit expansion of 20 billion yuan.
Near the closing, the Nikkei 225 index rose by 0.1 percent in Japan, the Shanghai composite index increased by 1 in China, the Kospi index in South Korea rose by 0.1 percent and the Hang Seng index in Hong Kong rose by 1.1 percent.
BIST 100 index in Borsa Istanbul, which followed a sales-weighted course on Friday, finished the day at 5,092.88 points, 0.83 percent below the previous close.
Dollar/TL is trading at 19.3720 at the opening of the interbank market today, after closing at 19.3626 with an increase of 0.2 percent on Friday.
Analysts stated that today the housing sales and international investment position in the country and the New York Fed manufacturing index data in the USA will be followed abroad, and noted that technically, 5.150 and 5.200 levels in the BIST 100 index are in the resistance position, and 5.050 and 5,000 points are in the support position.
The data to be followed in the markets today are as follows:
10.00 Türkiye, house sales in March
10.00 Türkiye, international investment position for February
15.30 US, April New York Fed manufacturing index