Macroeconomic data announced in the USA continue to highlight the possibility of a soft landing in the country’s economy.
According to the data released in the country yesterday, the Consumer Price Index (CPI) in the USA remained below market expectations with an increase of 0.2 percent on a monthly basis and 3 percent on an annual basis in June. After slowing for 12 consecutive months, annual inflation fell to its lowest level since March 2021. Thus, the predictions that the Fed may put an end to its “hawk” steps after increasing the policy rate by 25 basis points this month strengthened the pricing in money markets.
Analysts stated that the Bank’s risk appetite increased with the pricing that indicates that the Bank’s tightening monetary policies are coming to an end.
Analysts, who stated that the risk appetite in the stock markets increased after the inflation data of the USA, said that today the attention was turned to the Producer Price Index (PPI) data to be announced in the USA.
In the same period, core inflation, which does not include variable energy and food prices, was below market expectations with 0.2 percent on a monthly basis and 4.8 percent on an annual basis.
Analysts said that data showing that inflation continues to slow raise expectations that Fed officials may reconsider their stance on further rate hikes.
On the other hand, the Fed’s Beige Book Report, published yesterday, showed that economic activity “has increased slightly” since the end of May, while the report stated that the expectations are that “slow growth will continue in the coming months”.
With these developments, purchases in the bond markets came to the fore yesterday, while the 10-year bond yields of the USA carried the downward trend for the fourth trading day in a row and fell to 3.85 percent.
The ounce price of gold showed its strongest increase since June 8, with 1.3 percent yesterday, and is trading at $1,957 on the new day, parallel to the previous close.
The dollar index, on the other hand, carried the downward trend for the 6th consecutive trading day and fell to 100.4, its lowest level since April 21, 2022.
The barrel price of Brent oil rose to its highest level since April 28 with 80.3 dollars, as the concerns that the supply will remain below the demand and the fears of recession in the USA decreased.
The Bank of Canada, in its monetary policy decision announced yesterday, increased the policy rate by 25 basis points, in line with expectations, to 5.00 percent, the highest level in 22 years, while it was reported that the bank will continue to tighten its monetary policy.
In addition, in the balance sheet season in the USA, Pepsi and Delta Airlines are expected to announce their second quarter company financial results today, while the results of banks such as JP Morgan, Wells Fargo, Citi Group and BlackRock will be in the focus of investors tomorrow.
Yesterday, the S&P 500 index increased by 0.77 percent, the Nasdaq index increased by 1.15 percent and the Dow Jones index increased by 0.25 percent in the New York stock market. Index futures contracts in the USA started the new day with a rise.
Europe
While a positive trend emerged in Europe yesterday, the NATO Summit continues to be at the center of the agenda.
Analysts reminded that the inflation pressure across the European region remained stronger than in the USA, adding that this situation raised questions about when the European Central Bank (ECB) would end its tightening monetary policies.
Following these developments, the euro/dollar parity, which carried its upward trend for the 6th consecutive trading day, reached the level of 1.1150 with an increase of 0.1 percent and reached its highest level since March 22, 2022.
On the other hand, according to the data released today, industrial production in the UK decreased by 0.2 percent monthly and 2.3 percent annually in May.
Yesterday, FTSE 100 index gained 1.83 percent in England, DAX 40 index gained 1.47 percent in Germany, CAC 40 index gained 1.57 percent in France and MIB 30 index gained 1.75 percent in Italy. Index futures contracts in Europe started the new day with a rise.
Asia
After the US inflation data, the increased risk appetite carried over to Asian stock markets, while technology sector shares led the rise in question.
According to the data released today in China, exports decreased by 12.4 percent in June. Despite the fact that exports, which decreased for two consecutive months, raised questions about the country’s economy, the expectation that the Chinese government would support different areas of the economy increased.
Close to the closing, Nikkei 225 index rose 1.4 percent in Japan, Shanghai composite index rose 0.9 percent in China, Kospi index rose 0.9 percent in South Korea and Hang Seng index rose 2.5 percent in Hong Kong.
Domestic markets
BIST 100 index in Borsa Istanbul, which followed a fluctuating course in the domestic market yesterday, closed the day at 6,342.05 points with a decrease of 0.33 percent.
After closing at 26.1459 with an increase of 0.1 percent yesterday, the dollar/TL is trading at 26,1400, just below the previous close at the opening of the interbank market today.
US President Joe Biden stated that he is confident that Turkey will continue to support Sweden’s participation in NATO and that they can sell their F-16 warplanes.
With these developments, Turkey’s 5-year credit risk premium (CDS) carried its downward trend for the fourth trading day in a row, and fell to 441 basis points yesterday.
On the other hand, yesterday, the Capital Markets Board (CMB) decided to impose a temporary transaction ban on 5 people for a period of 6 months.
