While there remain uncertainties about what path the Fed will follow in the rest of the year, data-oriented action is expected, as previously emphasized by bank officials.
While the predictions that the Fed may keep the policy rate high for a long time are increasing after the recently announced data in the USA gave strong signals about economic activity, clues about the steps the Bank will take in the future will be sought from the August Consumer Price Index (CPI) data to be announced this week in the country. .
Analysts stated that the impact of the supply disruptions in the energy sector can be seen in this week’s inflation data and noted that the annual CPI is expected to increase by 3.6 percent. Annual inflation was 3.2 percent in July.
Analysts stated that it is certain that the Fed will leave the policy rate constant in the September meeting, based on the pricing in the money markets, and pointed out that the probability of the Fed increasing the interest rate by 25 basis points in its November meeting has increased to 44 percent, indicating that uncertainty has increased.
On the other hand, the declaration published after the 18th G20 Leaders Summit, hosted by India, with the main theme of “One World, One Family, One Future”, included dynamic targets regarding climate action.
Making statements after the G20 Summit, US Treasury Secretary Janet Yellen emphasized that she is increasingly confident that they can control inflation without damaging the employment market.
The dollar index, which started the week with an intense macroeconomic data agenda at 104.7 with a decrease of 0.4 percent, increased by 0.8 percent last week, carrying its upward trend to 8 consecutive weeks, and achieved the strongest upward trend since 2014.
Behind supply restrictions, the barrel price of Brent oil, which completed last week with an increase of 1.6 percent at $ 90.2, achieved its highest weekly closing since November 2022. Brent oil started the new week with a horizontal trend.
On Friday, the Dow Jones index increased by 0.22 percent, the S&P 500 index increased by 0.16 percent and the Nasdaq index increased by 0.09 percent in the New York stock exchange. Index futures contracts in the USA started the new week with a mixed course.
Europe
While European stock markets followed a mixed course, all eyes this week turned to the ECB interest rate decision and the speech by ECB President Christine Lagarde.
Analysts stated that the inflation and recession dilemma continues to exist in Europe and that volatility in the markets may increase after the ECB’s September meeting to be held this week.
Stating that the data recently announced in the region gives mixed signals about economic activity, analysts noted that the money markets are pricing in a 62 percent probability that the ECB will keep the interest rate constant.
Verbal guidance from bank officials continued last week. ECB Board Member Klaas Knot stated that he thought that the possibility of an interest rate increase was underestimated in the pricing of the September meeting in the money markets.
On the last trading day of last week, the DAX 40 index in Germany was 0.14 percent, the CAC 40 index in France was 0.62 percent, the FTSE 100 index in the UK was 0.49 percent and the FTSE MIB 30 index in Italy was 0.28 percent. gained value. Index futures contracts in Europe started the new week with a mixed course.
Asia
A mixed trend stood out in Asian markets.
While a mixed course was observed in Asian markets due to the “hawkish” tone of guidance of Bank of Japan (BoJ) Governor Kazuo Ueda and the intervention of the Central Bank of China (PBoC) in the yuan, the industrial production data to be announced this week across the region became the focus of investors.
After BOJ Governor Ueda stated that the central bank could end its negative interest rate policy if the 2 percent inflation target is achieved and signaled a possible interest rate increase, the Japanese yen gained approximately 0.7 percent value against the dollar.
On the Chinese side, the Chinese yuan, which lost value last week due to the increasing risk perception regarding the economy, showed a sharp rise against the dollar today with the intervention of the PBoC. The dollar/yuan parity, which reached its peak in the last 16 years on Friday, is currently trading 1.4 percent below its previous close.
Near the close, the Nikkei 225 index in Japan decreased by 0.5 percent and the Hang Seng index in Hong Kong, which was closed to trading on Friday and reopened today due to adverse weather conditions, decreased by 0.9 percent, while the Shanghai composite index in China decreased by 1 percent and in South Korea. Kospi index increased by 0.3 percent.
Domestic markets
Domestically, the BIST 100 index at Borsa Istanbul, which followed a fluctuating course on Friday, achieved the highest weekly closing of all time, although it completed the day at 8,325.30 points with a 0.15 percent loss of value. The index broke its highest level record to 8,398.44 points.
After the markets closed on Friday, international credit rating agency Fitch Ratings confirmed Turkey’s credit rating as “B” and increased the rating outlook from “negative” to “stable” after 2 years.
In the statement made by the organization, it was emphasized that the revision of the outlook to “stable” reflects a return to a more traditional and consistent policy mix that reduces short-term macrofinancial stability risks and alleviates balance of payments pressures.
Dollar/TL is traded at 26.8230 at the opening of the interbank market today, after closing at 26.8448 with a horizontal course on the last trading day of last week.
Analysts stated that current account balance, unemployment rate and industrial production data will be followed domestically today, and consumer inflation expectation data in the USA will be followed abroad today, and noted that technically, 8,400 and 8,500 points in the BIST 100 index are resistance, while 8,300 and 8,200 points are support.
