The fact that the inflation announced in the USA was above expectations on an annual basis has relatively increased the possibility that the US Federal Reserve (Fed) will increase interest rates once again for the rest of the year.
According to the data announced yesterday, the Consumer Price Index (CPI) in the USA increased by 0.6 percent on a monthly basis in August, within expectations, and on an annual basis by 3.7 percent, above market expectations.
CPI, which increased in line with market expectations on a monthly basis, recorded the biggest increase since June 2022.
In the same period, core CPI, which does not include energy and food prices, increased by 0.3 percent monthly and 4.3 percent annually. During the said period, core inflation recorded its lowest level since September 2021 on an annual basis.
While core inflation was above market expectations on a monthly basis, it was parallel to market expectations on an annual basis.
Analysts said that the fact that inflation exceeded expectations, at least partially, increases the possibility of the Bank going for another interest rate increase at its November or December meeting.
Stating that it is certain that the Fed will keep the policy rate constant at 5.25-5.50 percent in the pricing in the money markets, analysts stated that the probability of the Bank increasing the interest rate by 25 basis points in the November or December meeting has increased to 42 percent.
On the other hand, international credit rating agency Fitch Ratings increased its growth expectation for the global economy from 2.4 percent to 2.5 percent this year, and reduced it from 2.1 percent to 1.9 percent for next year.
Fitch published the September issue of its Global Economic Outlook Report with the title “China Concerns Are Increasing”.
The International Monetary Fund (IMF), on the other hand, stated that global debt remained significantly above its pre-Covid-19 epidemic levels last year and reported that it could return to its long-term upward trend. In the statement, it was noted that global debt was 235 trillion dollars, 200 billion dollars above its level in 2021.
Looking at the cryptocurrency markets, it was announced that the cryptocurrency exchange FTX, which went bankrupt a while ago, could liquidate its cryptocurrency assets with a court decision. Thus, FTX was allowed to sell up to $100 million in cryptocurrencies per week.
On the energy side, according to the global oil market report for August released yesterday by the International Energy Agency (IEA), the announcement of Saudi Arabia and Russia, the largest producers of the OPEC + group, that they will extend the daily cut of approximately 1.3 million barrels until the end of the year, caused a serious shock to the markets. faced a supply deficit.
The barrel price of Brent oil, which continued its rise after the report, was traded at $91.9 with a 0.1 percent gain in value, and carried its upward trend to the 4th consecutive trading day.
In addition, yesterday in the USA, after the leaders of the country’s 10 largest technology companies, including senior executives of giant companies such as Microsoft, Tesla, Meta and Google, came together in Congress for artificial intelligence-related issues, increases were observed in the share prices of the relevant companies.
Microsoft closed the day with a gain of 1.3 percent, Tesla with 1.4 percent, Meta with 1.1 percent and Google with 1 percent.
Following these developments, the Dow Jones index in the New York Stock Exchange decreased by 0.20 percent, while the S&P 500 index increased by 0.12 percent and the Nasdaq index increased by 0.29 percent. Index futures contracts in the USA also started the new day with a mixed course.
Europe
While European stock markets are on a bearish course, today the ECB’s interest rate decision as well as Lagarde’s statements after the decision are in the focus of investors.
While the data announced in Europe, where the inflation and recession dilemma continues, continues to give negative signals about economic activity, pricing in the money markets predicts that the ECB will increase the policy rate by 25 basis points with a 70 percent probability today.
Since the beginning of the month, it has been priced that the Bank would increase interest rates with a probability of approximately 40 percent.
Analysts noted that Lagarde’s statements following the ECB’s interest rate decision will look for clues about what steps the Bank will take in the coming period.
According to the data announced yesterday, the British economy contracted by 0.5 percent monthly in July, remaining below expectations, while industrial production decreased by 0.7 percent monthly. In the same period, industrial production in the Eurozone fell below expectations with a monthly decrease of 1.1 percent.
Yesterday, the DAX 40 index in Germany lost 0.39 percent, the CAC 40 index in France lost 0.42 percent, the FTSE 100 index in England lost 0.02 percent and the FTSE MIB 30 index in Italy lost 0.36 percent. Index futures contracts in Europe started the new day with a mixed course.
Asia
A mixed trend also stood out in Asian markets. The increased volatility in global markets following the US inflation data also moved to Asian markets.
Japanese Economy Minister Yoshitaka Shindo said in his statement, “Positive signals are emerging for the end of deflation.” he said. With Shindo stating that “the government will use all policies aimed at economic management and development”, it was seen that risk appetite increased in the Japanese stock markets.
On the other hand, according to the data announced today in the country, industrial production remained above expectations, although it decreased by 1.8 percent on a monthly basis in July.
While concerns about economic activity continue on the Chinese side, international credit rating agency Moody’s lowered its outlook for China’s real estate sector from “stable” to “negative”.
Near the close, the Nikkei 225 index in Japan gained 1.4 percent and the Kospi index in South Korea gained 1.2 percent, while the Hang Seng index in Hong Kong decreased by 0.2 percent and the Shanghai composite index in China decreased by 0.1 percent. .
Domestic markets
BIST 100 index at Borsa Istanbul, which followed a sell-off trend yesterday, closed the day at 8,013.89 points with a loss of 1.79 percent.
Dollar/TL is traded at 26.9450 at the opening of the interbank market today, after closing the day at 26.9350 with a 0.2 percent increase yesterday.
On the other hand, the Central Bank of the Republic of Turkey (CBRT) increased the required reserve ratio in Exchange Protected Deposits (KKM). While the KKM required reserve ratio was differentiated according to maturity, the required reserve ratio of up to 6 months maturity, where KKM is concentrated, was increased by 10 points to 25 percent. The required reserve ratio for maturities up to 1 year and 1 year and longer was determined as 5 percent.
Analysts today are reporting domestically, the private sector’s loan debt from abroad and weekly money and bank statistics, and abroad, ECB interest rate decision and Lagarde’s statements, as well as retail sales, Producer Price Index (PPI) and weekly unemployment benefit applications data in the USA. Stating that they will be followed, he noted that technically, 8,100 and 8,200 points in the BIST 100 index are resistance, while 8,000 and 7,900 points are support.
