While the macroeconomic data announced in the USA last week pointed out that the country’s economy remained strong, the minutes of the last meeting of the Fed and the evaluations of the Fed officials increased the uncertainties regarding the Bank’s monetary policy in the next period.
It was noted in the minutes that inflation was still well above the Bank’s long-term target.
Analysts stated that the Fed is predicted to leave the policy rate unchanged with a 90 percent probability next month in the pricing of the money markets, and stated that the uncertainties regarding the other two meetings to be held until the end of the year remain strong.
While a sales-heavy trend was observed in the stock markets last week with the ongoing uncertainties, it is stated that the statements of the Fed officials will be critical in the new week. In this context, the messages of the central bank officials will be followed closely at the Jackson Hole Economic Policy Symposium, which will start on Thursday. Fed Chairman Jerome Powell will also deliver a speech on Friday as part of the symposium.
In the symposium, which has been organized by the Kansas City Fed since 1978 and attended by central bank governors, finance ministers and academics from around the world, the current global economic situation in general is discussed, evaluations on the future of monetary policy and guidance on possible policy steps come to the fore.
Analysts stated that in Powell’s statements, clues about the Fed’s future monetary policy steps will be sought, and that the statements may increase the volatility in the markets.
While the selling pressure in the bond markets continued with these developments, the 30-year interest rate of the USA increased to 4.4260 percent since 30 June 2011 and the 10-year bond interest rate to 4.3290 percent since 8 November 2007. .
Noting that the highest bond yields in the last 10 years and the concern of recession could make US bonds stand out among investment instruments at these levels, analysts reported that there was an inflow of approximately 130 billion dollars into bond funds this year.
On the other hand, gold, which carried the downward trend for the fourth week in a row and realized the lowest weekly close of the last 5 months with $ 1,889.6, is currently trading at $ 1,891, 0.1 percent above its previous closing.
Analysts stated that the demand for the dollar increased globally due to the increase in the uncertainties regarding the Fed’s future monetary policy, and said that this situation caused the gold prices to decline.
On Friday, a mixed course was observed in the New York stock market. The Dow Jones index rose 0.07 percent, the S&P 500 index fell 0.03 percent and the Nasdaq index fell 0.20 percent. Index futures contracts in the USA started the new day with a flat course.
While a sales-heavy trend was prominent in the European stock markets last week, the European Central Bank (ECB) President Christine Lagarde’s speech in Jackson Hole, as well as the news flow on the economy of China, the largest trading partner of the region, will be in the focus of investors.
The fear of a recession, which is already strong in the region, was added to the fear that economic activity in China would slow down further and negatively affect the region’s production.
Analysts stated that the leading manufacturing industry, service sector and combined Purchasing Managers Index (PMI) data to be released across the region this week may give signals about the economic activity of the region.
In the European stock markets, which followed a fluctuating course throughout the last week with these developments, the FTSE 100 index in the UK was 0.65 percent, the DAX 40 index in Germany was 0.65 percent, the CAC 40 index in France was 0.38 percent, and Italy was down. The MIB 30 index fell by 0.42 percent.
The euro/dollar parity, which carried the downward trend for the fifth week in a row last week with the strong global demand for the dollar, is currently at 1.0880, 0.1 percent above its previous closing.
On the Asian side, the Chinese Central Bank’s lowering of the lowest loan interest rate lower than the expectations caused an increase in the concerns in the markets. The bank lowered the 1-year loan interest rate by 10 basis points to 3.45 percent, while keeping the 5-year loan interest rate constant at 4.20 percent.
While the already slowing economic activity in the country and the declining global demand cause recession concerns to increase, although the Chinese government has expressed at every opportunity that it will take steps to support the economy, the steps taken so far have not been found enough by the markets.
While the increasing risk perception in China has brought the dollar/yuan parity to the peak of the last year, it is stated that the Central Bank of China may have made the strongest intervention in its history through public banks to prevent the depreciation of the yuan.
While the Shanghai composite index in China and the Hang Seng index in Hong Kong decreased by 1.4 percent near the closing, the Nikkei 225 index in Japan increased by 0.7 percent and the Kospi index in South Korea increased by 0.6 percent.
While the BIST 100 index in Borsa Istanbul, which followed a fluctuating course in the domestic market last week, closed the day at 7,513.29 points with a decrease of 3.23 percent on Friday, this week the eyes were turned to the interest rate decision to be announced by the Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee. .
Economists participating in AA Finans’ expectation survey regarding the CBRT Monetary Policy Committee meeting estimate that the one-week repo auction rate (policy rate) will be increased by 250 basis points to 20 percent.
Dollar/TL is trading at 27.1980 at the opening of the interbank market today, after completing the Friday at 27.1073, just above the previous close.
On the other hand, with the CBRT communiqués published in the Official Gazette at the weekend, a regulation was made to increase Turkish lira (TL) deposits and decrease the Currency Protected Deposits (KKM).
Accordingly, within the scope of the simplification process, the implementation of the conversion target from foreign currency deposits to KKM and the practice of establishing additional/discounted securities according to TL share were terminated.
Analysts stated that the international Producer Price Index (PPI) data in the country and the PPI data in Germany come to the fore today, and noted that the levels of 7,600 and 7,700 in the BIST 100 index are technically in the position of resistance, and 7,500 and 7,400 points are in the support position.