Uncertainties regarding monetary policy and the resurgence of the possibility of recession negatively affect the risk appetite of investors.

While the downgrade of 10 small and medium-sized US banks by the international credit rating agency Moody’s led to a new wave of sales, it was stated in the statement made by the institution that similar downgrades could be made for a few important banks.

Moody’s lowered the ratings of 10 US banks by one notch, and examined 6 banks, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial, for possible downgrades.

Analysts said that Moody’s warning of some banks gave investors another reason to be cautious after Fitch downgraded the US credit rating last week, and said that concerns about the health of the banking sector in the USA came to the fore again.

After the downgrade, the shares of Goldman Sachs and Bank of America, one of the largest banks in the USA, fell by 2 percent and the shares of JPMorgan Chase by approximately 1 percent.

On the other hand, while the statements of the US Federal Reserve (Fed) officials continue to be in the focus of investors, Philadelphia Fed President Patrick Harker stated that they do not want to go too far in tightening, and that they will probably start lowering interest rates next year.

Analysts said the possibility is still on the table that the Fed will raise rates once again this year, despite Philadelphia Fed President Patrick Harker saying that an additional rate hike may not be needed.

While the US Treasury Department’s bond issuances were also followed closely, there was intense demand for the Ministry’s 3-year bond issuance of $42 billion. The $42 billion three-year bond sale yielded a lower-than-expected yield, a sign that demand is stronger than expected.

The US Treasury Department is expected to issue $38 billion in 10-year bonds today and $23 billion in 30-year bonds tomorrow.

Analysts stated that the demand in the auctions can give important messages regarding the market expectations, and that the interest rates that will occur especially in the 30-year bond issuance and the latest situation in the yield curve will be closely monitored.

On the macroeconomic data side, the foreign trade deficit in the USA decreased by 4.1 percent on a monthly basis in June and fell to 65.5 billion dollars. In this period, the country’s exports fell to its lowest level since March 2022 due to weakening global demand, while imports fell to its lowest level since November 2021 due to the ongoing high inflation and rising interest rates affecting domestic demand.

In the USA, wholesale stocks decreased by 0.5 percent in June, more than expected, while wholesale sales decreased by 0.7 percent to $643.3 billion.

While the barrel price of Brent oil decreased by 0.2 percent in the new day due to concerns about the economic situation in China, it was traded at $ 85.8, while the price of an ounce of gold hovered at $ 1,930 with an increase of 0.3 percent.

With these developments, the Dow Jones index decreased by 0.45 percent, the S&P 500 index decreased by 0.42 percent and the Nasdaq index decreased by 0.79 percent in the New York stock market yesterday. Index futures contracts in the USA started the day with mixed movements.


Europe

European stock markets were also negative after the Italian government’s decision to impose taxes on Italian banks.

The Italian government will impose an additional 40 percent tax on excess profits made by banks from high interest rates. With the tax in question, it is expected that an additional tax of up to 3 billion euros will be collected from Italian banks.

Inflation in Germany was realized as 0.3 percent monthly and 6.2 percent annually, in line with expectations.

Yesterday, the FTSE 100 index in the UK lost 0.4 percent, the FTSE MIB 30 index in Italy fell 2.1 percent, the CAC 40 index in France fell 0.7 percent, and the DAX 40 in Germany lost 1.1 percent.


Asia

Asian markets, on the other hand, follow a sales-weighted course, excluding South Korea, following the inflation data announced in China.

In China, the Producer Price Index decreased by 0.3 percent and the Consumer Price Index (CPI) decreased by 4.4 percent in July. The announced data revealed that both PPI and CPI declined simultaneously for the first time since 2020.

Analysts stated that, together with the data announced in China, both the decline in global demand and the ongoing deflationary process in the country increased the concerns about the economic activity of the country.

Close to the closing, Nikkei 225 index in Japan decreased by 0.6 percent, Hong Kong Hang Seng index decreased by 0.1 percent, and Shanghai composite index decreased by 0.4 percent in China, while Kospi index gained 1.1 percent in South Korea.


Domestic markets

BIST 100 index in Borsa Istanbul, which had a downward trend in the domestic market yesterday, lost 0.78 percent and closed the day at 7,412.20 points.

Dollar/TL is trading at 27,0200 at the opening of the interbank market today, after completing the day at 26.9810, just below the previous close.

Stating that the data calendar is calm both at home and abroad today, analysts noted that technically, 7.350 and 7.250 levels in the BIST 100 index are support and 7.500 and 7.750 points are resistance.

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