The agenda is busy after the holiday | Market News

Before the holiday, there was a fluctuating course in the markets. After the holiday, the agenda will be intense in the markets. Inflation data will be announced on 5 May. Outside, there is a meeting of the US Federal Reserve (Fed) on May 4. Another issue that the markets will follow will be the US non-farm payrolls data.

Here is this week’s article by Hürriyet newspaper writer Zeynel Balcı…

Markets entered the holiday with a fluctuating course. While the reaction escalation in Borsa Istanbul did not gain strength, a similar outlook is valid for foreign stock markets as well. Stock-based movements related to the first quarter balance sheets published in both Borsa Istanbul and the US stock markets came to the fore. It would not be wrong to say that the high profitability in Borsa Istanbul, especially in the bank balance sheets, could not carry the market any longer. Another development that carried the stock markets apart from the balance sheets was high inflation and the search for alternative returns. Apart from Turkey, the USA and Germany are facing the highest inflation in the last 40 years. While inflation (CPI) was announced as 7.8 percent in Germany last week, it was 7.5 percent in the Euro Zone. In the USA it is at 8.5 level. After the holiday, the agenda is busy and important. Turkey’s inflation data for April will be announced on 5 May. Expectations are around 5.5-6.0 percent monthly and 67-68 percent annually. Last week, CBRT had the second ‘Inflation Report’ presentation of this year. In the presentation; While the 2022 inflation (CPI) forecast was reduced from 23.2 percent to 42.8 percent, it was announced that it was predicted to be 12.9 for 2023 and 8.3 for 2024. The Russian-Ukrainian war was cited as the reason for the high inflation, with the increase in energy and food prices in the outside world, the increase in exchange rates and the problems in the supply supply routes. As it is understood from the presentation, there are predictions that inflation will peak towards the end of the year, when it will peak in June. Since there is no interaction between inflation and the CBRT’s interest rate decisions, the reflections of April data on the markets will be weak. Despite the interest rate hike process and rising inflation in the outside world, Turkey continues its policy of low interest rates (minus interest rate-inflation interest rate difference).


Another important agenda after the holiday is the US Federal Reserve (Fed) meeting to be held on May 4. Fed Chairman Powell made a statement about a 50 basis point increase. There is no uncertainty in this. However, the expected decision to reduce the balance sheet will be more important. The amount and speed of reduction will be monitored. There’s also US nonfarm payrolls on Friday. The Fed’s policy of monetary tightening by increasing interest rates in March has been priced in by the markets for a while. While this situation put pressure on stock markets and gold prices, it manifested itself as an appreciation in the US dollar and an increase in bond interest rates. The Dollar Index, which shows the change of the US dollar against six currencies, especially the Euro and the Japanese Yen, is trading at 103 levels, while the US 10-year bond interest rate continues to rise. Looking at the agenda, the markets expect a fluctuating course after the holiday.


Turkey Growth forecasts for the global economy, including the global economy, have been revised downwards by many institutions for a long time. There were deeper revisions, especially for the European economy, which felt more deeply the Russia-Ukraine war. IMF, World Bank and famous US investment banks have announced their views in this direction one after the other. The news that made people say that they weren’t expected so quickly came from the USA last week. US first quarter growth (GDP) was -1.4%. (Exp. +1.1%, previous +6.9%) It is difficult at this stage for the contraction in the US economy to cause a change in the Fed’s monetary tightening policy. However, stagflation and recession discussions for the global economy will be on the agenda more and more. The first quarter growth in Germany was 0.2 percent, while the growth in France was 0 percent. Forecasts regarding the course of the economies started to gain reality a little too early. From a micro point of view, it is the profitable and vibrant companies that carry the stock markets. If economic growth is to weaken, its effects will be felt on company balance sheets. On the one hand, interest rate hikes and tight monetary policies of leading central banks, on the other hand, economic slowdown. In a way, this outlook heralds that it will be a difficult period for the markets.


Gold Considering the important parameters affecting the price, it is possible to list the main factors such as inflation, interest rates, geopolitical developments, physical trades, and the value of the US dollar. It should be admitted that the effects of the Russia-Ukraine war and the need for a safe harbor have weakened for now. High inflation continues, and it looks like it will last, at least for a while. The appreciation of the US dollar started to lose momentum. After approaching the 104 limit, the Dollar Index retreated to 103 levels. The primary agenda for gold prices at this stage is the May 4 Fed meeting. The interest rate hike and the subsequent balance sheet reduction decision is a development that will suppress gold prices for the short term. However, the surprise contraction in the US economy in the first quarter last week may weaken the Fed’s hand in medium and long-term interest rate hikes. This may lead to being more cautious about tight monetary policy. This possibility started to show itself a little as a reaction rise in the ounce price of gold. If it is remembered, we asked several times in our previous articles whether the central banks could be aggressive in raising interest rates while the economies were slowing down. As the global economy weakens, it will be difficult to implement tight monetary policy. However, when the economy slows, demand inflation also falls. However, the recent increases in inflation are mainly supply-side, cost inflation. There will be an improvement in this direction as well. In addition, such as the end of the Russia-Ukraine war, the elimination of closures and restrictions due to Kovid-19 cases in China.


On the other hand, the weakening of monetary tightening by the Fed and the European Central Bank due to recession and stagflation concerns in the medium and long term may be a supportive development for the stock markets. In a sense, China and Japan these days are exemplary. Stock markets in the Far East rose on Friday as the Central Banks of China and Japan took a stance in favor of loose monetary policy. However, inflation in China and Japan is not as high as in the USA and Europe. They are more comfortable with interest rate cuts and monetary expansion. While the Central Bank of China interest rate is above inflation at 3.7%, annual inflation (CPI) is 1.5% in China and 1.2% in Japan. In the upcoming period, economic administrations will make their monetary policy decisions according to inflation and the general course of their economy. It may be misleading to use very precise statements in terms of monetary policies of central banks already. To add as a footnote; The Central Bank of Russia, which has been the subject of serial rate hikes in the past months, cut the interest rate by 3 points to 14% on Friday. Interest rates come back as quickly as they left. In addition, the Central Bank of Russia expects a contraction of 8-10% in the economy for 2022. Of course, Russia is not a very good example, as it has a special situation such as war.


Profit sales on the EXCHANGE gained depth and oscillated below the exit trend support. Initial support at 2400. Reaction purchases can be seen above this level. Otherwise, the next supports are at 2,350-2,340 and 2,300. The first resistances in possible reaction purchases are seen at the levels of 2.450-2.475. The resistances to be given above these levels are found at 2.510 and 2.560 levels. Despite the attempts to buy reaction at the support points, the selling pressure is maintained.



Source: bigpara- GÜNDEM by

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