The news flow about the US economy continues to affect asset prices.
While US President Joe Biden, who is expected to meet with Congress leaders once again on Tuesday regarding the debt limit, paints an optimistic picture regarding the negotiations, US House of Representatives Speaker Kevin McCarthy, in his statements before today’s meeting, said, “I still think we are very far from each other”.
Analysts noted that the debt limit crisis suppressed asset prices and stated that the news flow on the subject was closely followed by investors.
While questions about the US Federal Reserve’s (Fed) monetary policy continue, international credit rating agency Moody’s stated that the Fed is expected to maintain its restrictive monetary policy stance until the end of the year, and it is believed that it is unlikely to lower the interest rate until the beginning of next year.
Fed officials continue their verbal guidance. Atlanta Fed President Raphael Bostic stated that they have made good progress in terms of inflation and that he predicts inflation to be around 3 percent by the end of the year.
Bostic stated that he tended to pause the rate hikes in June and stated that the Fed is currently in the most difficult phase of reducing inflation.
Richmond Fed President Thomas Barkin said he does not see an obstacle to higher interest rates if inflation continues.
After these developments, the expectations that the Fed will increase interest rates by 25 basis points next month in the pricing in money markets rose above 20 percent.
Yesterday, the S&P 500 index rose 0.3 percent, the Dow Jones index rose 0.14 percent and the Nasdaq index rose 0.66 percent in the New York stock market. Index futures contracts in the USA started the new day with a decline.
Industrial production fell in Europe
While the concerns about the economic activity in Europe continue to increase, the eyes of the European Central Bank (ECB) President Christine Lagarde on the monetary policy at the state decoration ceremony to be given to the former German Chancellor Angela Merkel have been placed in the focus of investors.
According to the data released in the region yesterday, industrial production in the Euro Zone decreased by 4.1 percent in March compared to the previous month.
Analysts stated that with the signs of weakening in China, one of the most important trading partners of the region, uncertainties regarding the monetary policies of the ECB increased.
While DAX 40 index increased by 0.02 percent in Germany, FTSE 100 index increased by 0.30 percent in Germany and CAC 40 index increased by 0.05 percent in France, MIB 30 index decreased by 0.37 percent in Italy. Index futures contracts in Europe started the new day with a decline.
Sales in China fell short of expectations
While the stock markets in Asia moved in an upward trend except for China, the macroeconomic data announced in China strengthened the concerns about the economy.
According to the data released in the country today, although April industrial production in China increased by 5.6 percent and retail sales by 18.4 percent, it fell short of expectations.
Analysts said that although the data in question raised concerns about the Chinese economy, the expectation that the People’s Bank of China (PBoC) could lower interest rates to support the economy limited the decline in Chinese stock markets.
While the Nikkei 225 index gained 0.73 percent in Japan, and the Hang Seng index in Hong Kong increased by 0.11 percent, the Shanghai composite index in China decreased by 0.3 percent and the Kospi index in South Korea decreased by 0.2 percent.
BIST 100 index in Borsa Istanbul, which followed a sales-weighted course in the domestic market yesterday, finished the day at 4,501.21 points, 6.14 percent below the previous closing.
On the other hand, Supreme Election Board (YSK) Chairman Ahmet Yener stated that in the Presidential Election held on Sunday, no candidate could qualify for election, and that it was decided to hold the second round of elections on Sunday, May 28, 2023, according to the previously announced Election Calendar.
Dollar/TL is traded at 19.6900 at the opening of the interbank market today, after closing at 19.6701 with an increase of 0.5 percent yesterday.
Analysts stated that today, an intense data agenda will be followed, mainly housing sales abroad, ZEW expectations index in Germany, 1st quarter growth in the Eurozone and retail sales and industrial production in the USA. He noted that the levels of 4.250 and 4.250 are in the position of support and 4.600 points are in the resistance position.