Continuing warm economic activity in the USA continues to increase the uncertainties regarding monetary policies.
Fed Chairman Powell, who made a presentation at the US Congress yesterday, signaled that the interest rate will be increased a little more this year, and stated that there is a long way to go in the process of reducing inflation to the 2 percent target.
Noting that almost all Federal Open Market Committee officials thought it would be appropriate to raise interest rates a little more until the end of the year, Powell said that it will take time for the full effects of monetary tightening, especially on inflation, to be seen.
Stating that they will continue to take their decisions from meeting to meeting according to the whole of the incoming data and risk balances, as well as their effects on the economic activity and inflation outlook, Powell said, “Two rate hikes by the end of the year seem like a pretty good forecast.” said.
While following the statements of other Fed officials, Chicago Fed President Austan Goolsbee pointed out that in the next few months, it will make sense whether goods inflation has decreased and that housing inflation should start to decline in the fall.
While it is predicted that the Fed will increase the policy rate by 25 basis points with a 71 percent probability next month in the pricing in the money markets, the possibility that the bank will increase the policy rate to 5.50-5.75% by the end of the year has also strengthened.
While these developments increased the volatility in the bond markets, short and medium-term bond rates in particular rose.
While the ounce price of gold carried the downward trend for the fourth day to $ 1,928 in the new day, the barrel price of Brent oil increased by 2 percent to $ 77 yesterday due to the decreasing recession concerns.
On the other hand, Tesla shares fell by about 5.5 percent after Barclays’ downgrade yesterday, while Amazon shares fell close to 1 percent after the US Federal Trade Commission filed a lawsuit.
Yesterday, the S&P 500 index fell 0.52 percent, the Nasdaq index fell 1.21 percent and the Dow Jones index fell 0.30 percent in the New York stock market. Index futures contracts in the USA started the new day with a sales-weighted course.
While the sales-weighted course in Europe, excluding Italy, moved to the third business day yesterday, the monetary policy decisions of the Bank of England (BoE) are in the focus of investors today.
According to the data released in the UK yesterday, the Consumer Price Index (CPI) remained unchanged at 8.7 percent in May, while core inflation rose to 7.1 percent.
With these developments, it is considered certain that the bank will increase interest rates by 25 basis points today in the pricing of money markets, while the probability of a 50 basis point interest rate increase has increased to 36 percent.
While the European Central Bank (ECB) officials’ protection of “hawk” tones continued to strengthen the risk perception, Isabel Schnabel said that profit and wage increases in the Euro Zone limited the fall in inflation.
Yesterday, the FTSE 100 index decreased by 0.13 percent in the UK, the DAX 40 index decreased by 0.55 percent in Germany and the CAC 40 index decreased by 0.46 percent in France, while the MIB 30 index increased by 0.12 in Italy. Index futures contracts in Europe started the new day with rising.
While the stock markets in Asia follow a sales-heavy course, uncertainties regarding the Fed’s monetary policies continue to erode the risk appetite.
While the Nikkei 225 index in Japan decreased by 0.7 percent near the closing, the Kospi index in South Korea rose by 0.3 percent.
BIST 100 index in Borsa Istanbul, which was mostly selling in the domestic market yesterday, finished the day at 5,186.83 points, 1.23 percent below the previous closing.
Today, while the eyes are turned to the monetary policy decisions of the CBRT, economists participating in the expectations survey estimate that the bank will increase the policy rate by 1,075 basis points to 19.25 percent.
Analysts noted that the policy text will be followed closely with the interest rate decision, and stated that the signals from the text are expected to have an impact on asset prices.
Dollar/TL is traded at 23.5680 at the opening of the interbank market today, after closing at 23.5737 with a flat course yesterday.
Analysts stated that the intense data agenda will be followed today, especially the CBRT’s interest rate decision in the country, BoE’s interest rate decision abroad, Fed Chairman Powell’s statements and second-hand house sales in the USA. He noted that the levels of 5,100 and 5,250 are in the position of support, and 5,250 and 5,400 points are in the resistance position.