While uncertainty continues in global economies in the dilemma of inflation and recession, the intense data agenda as well as the interest rate decisions of central banks have become the focus of investors this week.
While it is expected that the US Federal Reserve (Fed) will keep the policy rate constant at the meeting on Wednesday with a 99 percent probability in the pricing in the money markets, the policy text and the signals in the statements of Fed Chairman Jerome Powell after the meeting are in the focus of investors.
Analysts stated that the recently announced data in the USA gave strong signals about economic activity, and said that clues about what steps to take in the future will be sought from Powell’s verbal guidance after the Bank’s interest rate decision.
Analysts stated that the data announced in the country signaled that consumer demand was moderate and not high enough to trigger inflation concerns, and pointed out that this situation supported “soft landing” scenarios.
Analysts said that although consumer and producer inflation in the USA was above expectations, it was not enough to change the expectations that the Fed would leave interest rates unchanged at its meeting on September 20.
On the other hand, approximately 13 thousand workers who are members of the United Automobile Workers (UAW) union and work in the factories of General Motors, Ford and Stellantis decided to go on strike together for the first time in the 88-year history of the union. The employees reached this decision after their meeting with the factory managers regarding the salary increase for the renewal of their contracts, which expired last week, was negative.
Analysts stated that there is concern that the auto workers’ strike could negatively affect the country’s economy if it continues for a long time.
On Friday in the New York Stock Exchange, the S&P 500 index lost 1.23 percent, the Nasdaq index lost 1.56 percent and the Dow Jones index lost 0.83 percent. Index futures contracts in the USA started the new week with an increase.
Europe
While a buying trend came to the fore in European stock markets on Friday with the “dovish” statements of European Central Bank (ECB) President Christine Lagarde, the monetary policy decisions of the Bank of England (BoE) on Thursday became the focus of investors.
In the statement made last week by the ECB, it was stated that the Bank decided to increase the 3 main policy rates by 25 basis points, and the refinancing rate was increased to 4.50 percent, the deposit rate to 4 percent and the marginal funding rate to 4.75 percent. was recorded.
Making a statement after the decision, ECB President Lagarde said, “We have been in a very slow growth for 5 quarters. Looking at our projections, we are now approaching the end.” he said.
Analysts stated that expectations that the ECB may be approaching the end of the interest rate hike cycle have increased, and that developments regarding inflation will be effective in the Bank’s decisions.
Stating that it is priced in the money markets that the BoE will increase the policy rate by 25 basis points with an 84 percent probability, analysts also reminded that the Bank has not paused interest rate increases since the end of 2021.
On Friday, the FTSE 100 index in England increased by 0.50 percent, the DAX 40 index in Germany increased by 0.56 percent, the CAC 40 index in France increased by 0.96 percent and the MIB 30 index in Italy increased by 0.08 percent. Index futures contracts in Europe started the new week with an increase.
Asia
While Asian markets started the new week on a negative note, all eyes in the region turned to the monetary policy decision of the Bank of Japan (BoJ) this week.
Analysts pointed out that it is expected that the Chinese government will continue to take steps to support the economy and that they are closely monitoring whether these steps will continue.
Analysts stated that the Central Bank of China (PBoC) is expected to keep the benchmark interest rates, which are considered as reference for loans, constant this week, and said that the BoJ is not expected to change its monetary policy.
On the other hand, there will be no trading in the markets today in Japan due to a holiday.
Near the close, the Kospi index in South Korea decreased by 1.3 percent, the Hang Seng index in Hong Kong decreased by 0.9 percent and the Shanghai composite index in China decreased by 0.1 percent.
Domestic markets
While the BIST 100 index at Borsa Istanbul, which followed a sell-off trend in the country on Friday, completed the day at 7,961.98 points with a 1.93 percent depreciation, all eyes turned to the CBRT’s interest rate decision this week.
Economists participating in the expectation survey regarding the CBRT Monetary Policy Committee meeting estimate that the one-week repo auction interest rate (policy rate) will be increased by 500 basis points and reduced to 30 percent. According to the survey results, the policy rate expectations of economists, who predicted an increase of 250 to 600 basis points, were between 27.50 percent and 31 percent, and the year-end policy rate expectations were between 35 and 45 percent.
Dollar/TL is traded at 26.9980 at the opening of the interbank market today, after closing the day at 27.0032 with a 0.2 percent increase on Friday.
On the other hand, with the CBRT communiqués published in the Official Gazette, a technical change was made in the date condition of real person conversion accounts and the date was moved from 30 June 2023 to 31 August 2023.
Accordingly, domestic real persons will be able to convert their gold, dollar, euro and British pound deposit and participation fund accounts in banks into TL as of August 31, 2023.
Analysts stated that the data agenda abroad is calm today, while international investment position and housing price index data will be followed domestically, and noted that technically, 8,000 and 8,100 points in the BIST 100 index are resistance, while 7,900 and 7,800 points are support.
