While uncertainties about the future policies of central banks dominate global markets, the risk perception continues to be dulled by companies’ profits exceeding expectations during the intense earnings season. In the domestic market, attention has turned to the first “Inflation Report” meeting of the new President of the Central Bank of the Republic of Turkey (CBRT), Fatih Karahan.
Signals that economic activity remains strong in the United States and mostly favorable financial results from companies, coupled with income and profit forecasts for the upcoming period exceeding previous expectations, have played a role in reaching new highs on the New York Stock Exchange.
Yesterday, Ford’s shares, which forecasted higher than expected earnings for the year, rose more than 6%, and shares of video game company Roblox, which reported less loss than anticipated, gained 10%. The share price of U.S.-based chip manufacturer Nvidia also increased by about 3% and surpassed $700 for the first time.
On the other hand, Federal Reserve (Fed) officials continued their statements yesterday. Neel Kashkari, President of the Minneapolis Fed, expressed that the economy appears remarkably resilient, suggesting that time could be taken to evaluate the data before an interest rate cut. Fed Board Member Adriana Kugler noted that a cooling in inflation and labor markets could make an interest rate cut appropriate, indicating that if the downward trend in inflation stops, it might be suitable to keep the policy rate stable for a longer period. Boston Fed President Susan Collins emphasized that more data is needed before supporting an interest rate cut, suggesting that it might be appropriate to start easing monetary policy before the end of the year.
With the statements of Fed members, the possibilities that the Fed will keep the policy rate stable in March in the pricing in the money markets rose to around 82%.
Questions about when the bank will start interest rate cuts and signals from macroeconomic data have been effective in the search for direction in bond markets. Yesterday, the U.S. Treasury Department conducted a $42 billion sale of 10-year Treasury bonds. The yield on the 10-year U.S. Treasury bond is currently just above 4.10%, slightly above the previous closing.
The price of gold, which fluctuated in the range of $2,030-$2,045 yesterday, ended the day with a 0.1% decrease at $2,035. Today, it finds buyers at $2,032, slightly below the previous closing.
Developments in the Middle East are closely monitored, and expectations that strong global economies could support oil demand have led Brent crude oil barrel prices, which have been on the rise for the fourth consecutive trading day, to trade at $79.4 with a 0.1% increase.
Yesterday, the Nasdaq index in the New York Stock Exchange gained 0.95%, reaching its highest level in about two years, while the S&P 500 index increased by 0.82%, and the Dow Jones index completed the day with a 0.40% increase, achieving an all-time high. Futures contracts on indices in the U.S. started the new day with a positive trend.
While negative trends dominated European stock markets yesterday, data released in the region continues to give mixed signals. In Germany, industrial production, with a monthly decline of 1.6% in December, fell below expectations. In the UK, the average house price increased by 2.5% year-on-year in January, recording the strongest rise in the last year.
On the other hand, the international credit rating agency Fitch Ratings reported that the profitability of British banks is still strong, and Sarah Breeden, Deputy Governor of the Bank of England (BoE), stated that concerns about the need to raise policy rates in the country have diminished.
Yesterday, the FTSE 100 index in the UK fell by 0.68%, the DAX 40 index in Germany fell by 0.65%, the MIB 30 index in Italy fell by 0.45%, and the CAC 40 index in France decreased by 0.36%. In Europe, futures contracts on indices started the new day with a mixed trend.
While mixed trends were observed in Asian equity markets, the appointment of Vu Qing, former director of the Shanghai Stock Exchange, as the head of the China Securities Regulatory Commission (CSRC), despite concerns that data released in China increased deflation concerns, fostered expectations that strong measures to support the stock market would continue.
According to data released in China today, the Consumer Price Index (CPI) in January fell by 0.8% on an annual basis, falling below expectations. However, the Producer Price Index (PPI) realized a limited decline of 2.5%, albeit slightly above expectations.
On the other hand, despite Alibaba Group Holding’s announcement of a $25 billion share buyback, the stock price fell by about 7% in Hong Kong.
In Japan, after Japan Central Bank (BoJ) Deputy Governor Shinichi Uchida expressed that it would be difficult to raise the bank’s policy rate continuously and rapidly even after the end of the negative interest rate, the Japanese yen depreciated against the dollar.
Near the closing, the Nikkei 225 index in Japan increased by 1.9%, the Kospi index in South Korea increased by 0.1%, and the Shanghai Composite index in China increased by 0.5%. However, the Hang Seng index in Hong Kong decreased by 1.3%.
In the domestic market, Borsa Istanbul, which followed a selling-weighted trend yesterday and ended the 10-day rising series, closed the day with a 0.29% loss at 8,843.01 points. The index reached its highest level at 8,939.72 points.
Analysts pointed out that today, the focus of investors is on the first “Inflation Report” meeting of TCMB’s new President Fatih Karahan, and signals from the Inflation Report and Karahan’s statements could increase volatility in the markets.
After finishing the day with a 0.1% increase at 30.5842, the Dollar/Turkish Lira (USD/TRY) is trading at 30.5910 at the opening of the interbank market today.
Analysts stated that today, in addition to the Inflation Report in the domestic market, weekly money and banking statistics will be followed, and in the international arena, weekly jobless claims and wholesale goods inventory data will be monitored. They emphasized that technically, support levels for the BIST 100 index are at 8,750 and 8,620, and resistance is at 8,940 and 9,000 points.
The data to be followed in the markets today are as follows:
- 10:00 Turkey, real return rate of financial investment instruments in January
- 10:30 Turkey, CBRT’s inflation report
- 14:30 Turkey, weekly money and banking statistics
- 16:30 US, weekly jobless claims
- 18:00 US, wholesale goods inventory for December.
source: aa.com.tr / prepared by Melisa Beğiç