The US and Chinese economies continue to increase the risk perception in the markets for different reasons.
While the macroeconomic data announced in the USA indicate that the economic activity remained stronger than the expectations, this situation raises the question marks about where the US Federal Reserve (Fed) will determine the final policy rate.
Although the pricing that the Bank will not change the policy rate with a 90 percent probability next month remains strong, it remains unclear what steps it will take for the rest of the year.
Despite the Fed’s policy rate hike to the highest level in 22 years, the signals from the announced data that the economy is still warm continue to affect asset prices.
Yesterday, the US 10-year bond yield reached its highest level of the last 16 years with 4.3290 percent, while the inflation-indexed 10-year bond yield reached its highest level since 2008 with 1.95 percent.
While the said pricing continued to suppress the ounce price of gold, it also caused the sales to deepen in the stock markets.
While it was observed that especially technology companies led the downward trend due to increasing real returns, the strong stance of the economy in the USA reversed the decline in oil and copper prices. The barrel price of Brent oil rose 0.6 percent yesterday, while the pound of copper rose 1.1 percent.
With these developments, the Dow Jones index decreased by 0.84 percent, the S&P 500 index by 0.77 percent and the Nasdaq index by 1.17 percent in the New York stock market yesterday. Index futures contracts in the USA started the new day with a mixed course.
Europe
While a sales-weighted course stood out in the European stock markets, eyes were turned to the inflation data to be announced in the Eurozone today.
Despite the fact that the inflation across the region is still well above the targeted levels, the concerns about the economic activity and the negative news flow towards China, the most important trade partner of the region, continue to support the risk perception.
While the expectations that the European Central Bank (ECB) will pause its “hawk” steps in pricing in money markets continue to lose strength, it is predicted that the Bank will increase the policy rate by 25 basis points with a 60 percent probability next month. In yesterday’s pricing, the probability of an interest rate hike was at the level of 50 percent.
Yesterday, the FTSE 100 index in England fell by 0.63 percent, the CAC 40 index in France by 0.94 percent, the FTSE MIB 30 index in Italy by 1.03 percent and the DAX 40 index in Germany by 0.71 percent.
Asia
While the selling pressure in Asian markets was also effective on the last trading day of the week, the calming statements of the Chinese authorities were not effective either.
While the increasing risk perception in the country brought the dollar/yuan parity to the peak of the last year, it is stated that the People’s Bank of China (PBoC) may have made the strongest intervention in its history to prevent the depreciation of the yuan.
The possibility that the problems in the real estate sector in the country may spread to other areas of the economy are closely followed in the markets.
On the other hand, according to the data announced in Japan, the Consumer Price Index (CPI) increased by 3.3 percent in July, in line with the expectations.
Near the closing, the Nikkei 225 index in Japan lost 0.6 percent, the Hang Seng index in Hong Kong fell 1.5 percent, the Shanghai composite index in China lost 0.4 percent and the Kospi index in South Korea lost 0.6 percent.
Domestic markets
BIST 100 index in Borsa Istanbul, which has a buying weight in the domestic market, broke the closing record by closing the day at 7,764.47 points with a gain of 1.33 percent.
Dollar/TL is trading at 27.1060 at the opening of the interbank market today, after completing the day at 27.1021, 0.1 percent above the previous close.
Analysts stated that today, the Central Bank of the Republic of Turkey (CBRT) Market Participants Survey will be followed in the domestic market, and inflation data in the Eurozone abroad will be followed, noting that, technically, 7,850 and 8,000 levels in the BIST 100 index are in the position of resistance, and 7,700 and 7,600 points are in the support position.
