Global markets await Fed Chairman Powell’s presentation
While high volatility continues in global markets, the presentations of US Federal Reserve (Fed) Governor Jerome Powell at the Senate today and tomorrow are in the focus of investors.
In the new type of coronavirus (Kovid-19) epidemic worldwide, the number of cases exceeded 112 million, while the number of people who died approached 2.5 million. Although the rate of increase in cases slows in the epidemic, question marks regarding the risk of mutation and the recovery in global economies put pressure on markets.
Crystalina Georgieva, President of the International Monetary Fund (IMF), emphasized that the path to economic recovery due to the epidemic is quite uncertain and irregular, and stated that this leads to an increase in inequalities both between countries and within countries.
Von der Leyen, the President of the European Union (EU) Commission, called on member countries to approve the decision to increase the equity needed to start the rescue program they prepared to combat the economic consequences of the epidemic.
In addition to these developments, it was noteworthy that bond rates and commodity prices in developed countries, especially in the USA, continued to rise.
Yesterday, after the US House of Representatives Budget Committee approved the $ 1.9 trillion rescue package by President Joe Biden, the package is expected to pass by the House of Representatives towards the end of the week.
Despite the developments regarding the support package, a mixed trend was observed on the New York stock market yesterday. The Dow Jones index gained 0.09 percent, while the S&P 500 index fell 0.77 percent and the Nasdaq index fell 2.46 percent. The decline of Tesla shares by about 9 percent was effective in the fall of the Nasdaq index. The 10-year bond yields of the US stabilized just below 1.37 percent after hitting the highest level of the last year with 1.3940 percent yesterday.
On the European side, according to the data released yesterday, while industrial production in Germany decreased by 10.8 percent in 2020 compared to the previous year, especially with the decline in automotive and spare parts production, the Ifo Business Index rose to 92.4 points in February, exceeding expectations. It was reported that the optimism of companies despite the restrictions was effective in the rise of the index.
In his speech yesterday, European Central Bank President (ECB) Christine Lagarde said that the ECB closely monitors bond yields to assess whether the financing conditions are favorable enough to support the economy.
With these developments, the DAX index fell 0.31 percent in Germany, the FTSE 100 index fell 0.18 percent in the UK and the CAC 40 index in France fell 0.11 percent yesterday.
Today, on the Asian side, there are no transactions in the markets due to the public holiday in Japan, while the Shanghai composite index rose 0.5 percent in China and the Kospi index in South Korea remained flat. The continuation of the rise in oil and copper prices is among the prominent prices in Asian markets.
Brent oil price per barrel rose 1.7 percent to $ 65.5, while the pound price of copper rose 1.6 percent to $ 4.14, the highest level since September 2011.
Domestically, Borsa Istanbul followed a sales course yesterday, with the negative course of the European stock markets and the rise in foreign exchange rates parallel to the international markets. The BIST 100 index lost 0.62 percent and completed the day at 1.550.61 points. It was seen that the banking index, which lost nearly 2 percent, was effective in the fall of the index.
After seeing 7.0880 yesterday, the dollar / TL, which completed the day at 7.0249 with an increase of 0.7 percent compared to the previous close, is trading at 7.0090 at the opening of the interbank market today.
Analysts reported that the increase in commodity prices and bond rates caused an increase in volatility in global markets, despite the developments regarding the economic support package of the USA and the statements that the measures in the epidemic, especially in Europe, will gradually disappear from March.
Noting that inflation in the Eurozone and the consumer confidence index in the US are prominent in today’s data calendar, analysts stated that Fed Chairman Powell’s presentation to the Senate’s Banking, Housing and Urban Affairs Committee on the semi-annual Monetary Policy Report will be followed.
Analysts stated that, technically, 1.570 and 1.582 levels are in the resistance position and 1.525 points are in support position in the BIST 100 index, and the 6.95-7.05 band will be followed in the dollar / TL.
The data to be followed in the markets today are as follows:
10.00 UK, December unemployment rate
13.00 Eurozone, January Consumer Price Index
18.00 USA February consumer confidence index
