Global markets locked in Powell’s speech

While global markets watch cautiously before the speech of US Federal Reserve Chairman Jerome Powell, it is expected that Powell’s verbal guidance will have an impact on the direction of the markets.

While the increasing recession pressures around the world continue to be influential on asset prices, the expectations for the upcoming monetary policy decisions of the major central banks on a global basis are followed closely.


While the majority of Fed officials signaled that ultra-hawkish steps may slow down in their word-of-mouth guidance in recent weeks, it is anticipated that today Powell’s statements on the economy and labor market may clarify market expectations.

It is estimated that the signals of the third quarter Gross Domestic Product (GDP), ADP private sector employment and JOLTS number of job vacancies data on the course of the economy may increase the volatility in the markets.

Prior to today’s data and announcements, it is priced in the money markets that the Fed will increase interest rates by 50 basis points with a 68 percent probability and with a 32 percent probability by 75 basis points at the December meeting.

The strengthening expectations that China will abandon its “zero Kovid-19” policy and the decrease in oil stocks announced in the USA yesterday more than expected support oil prices.

The barrel price of Brent oil is trading at $ 84.8, with an increase of 0.3 percent in the new day, after gaining 1.2 percent yesterday.


While a mixed course was followed in the New York stock market yesterday, with the downward trend in technology stocks coming to the fore, the S&P 500 lost 0.16 percent and the Nasdaq index fell 0.59 percent. The Dow Jones index, on the other hand, remained flat. Index futures contracts in the USA started the new day with rising.

While inflation remains the number one item on the agenda in Europe, the inflation data released yesterday in Germany pointed to a slowdown in inflation after a long time.

In Germany, the Consumer Price Index (CPI) decreased by 0.5 percent monthly in November and increased by 10 percent on an annual basis. Expectations were for the CPI to increase by 10.3 percent in November.

While the easing of tension in China, one of the biggest trading partners of the region, has also positively affected asset prices, investors are focused on whether there will be a tone change in the verbal guidance of the European Central Bank (ECB) officials after yesterday’s German inflation data.

Yesterday, while the DAX 40 index depreciated by 0.19 in Germany, the FTSE 100 index increased by 0.51 percent in the UK, the CAC 40 index increased by 0.06 percent in France and the FTSE MIB index increased by 0.10 percent in Italy. Index futures contracts in Europe started the new day with an increase.

On the Asian side, the news flow from China continues to affect the equity markets positively.

In China, the government stated that it will focus on vaccinating the elderly population as a sign of change in the strategy to combat the Kovid-19 epidemic, which is causing increasing social and economic difficulties.

While these steps are estimated to be the beginning on the way back from the “zero Kovid-19” policy, the perception that the government has focused on the economy is getting stronger in the country.

Although the Japanese stock market diverged negatively with the macroeconomic data announced in Japan, it is seen that the index close to the closing made up for most of its losses.

Accordingly, industrial production in the country fell by 2.6 percent monthly, falling short of expectations. Housing starts in Japan also fell 1.8 percent year-on-year.

The Purchasing Managers Index (PMI) announced in China fell to 48 in the manufacturing industry and 46.7 in the service sector.

With these developments, the Nikkei 225 index in Japan decreased by 0.3 percent, while the Hang Seng index in Hong Kong increased by 0.4 percent and the Kospi index in South Korea increased by 1 percent. Shanghai composite index in China, on the other hand, remained flat.

Domestically, the BIST 100 index rose 0.8 percent yesterday, closing the highest level of all time with 4,962.48 points, and brought its highest level to 4,988.20 points.

Dollar/TL is traded at 18.6390 at the opening of the interbank market today, after closing at 18.6369 with a horizontal course yesterday.

While domestic eyes are turning to the third quarter growth data today, economists participating in the expectations survey of AA Finans expect the Turkish economy to grow by 3.9 percent in the third quarter.

Analysts stated that the intense data agenda, especially the CPI in the Euro Zone and growth in the USA, came to the forefront, and noted that the news flow about the protests in China, with Powell’s statements, was in the focus of investors.

Stating that technically, the 5,000 level in the BIST 100 index is in the resistance position, the analysts stated that 4.950 and 4.900 points may become support.


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