While the inflation and recession dilemma continues in the USA, pricing in the markets is getting harder.
The messages of the Fed officials who made statements yesterday and the macroeconomic data continue to give mixed signals.
st. Louis Fed President James Bullard stated that the upside risks in inflation continued and supported the 75 basis point rate hike, while Minneapolis Fed President Neel Kashkari said that the economy is still strong and they should continue to increase interest rates urgently to bring inflation down.
Kansas City Fed President Esther George said that the magnitude of future rate hikes is still a matter of debate.
San Francisco Fed President Mary Daly also reiterated in her statements that it is too early to declare victory over inflation. Defending that the interest rate should be slightly above 3 percent by the end of the year, Daly noted that a 50 or 75 basis point increase in interest rates for September is reasonable.
According to the macroeconomic data announced in the country, second-hand house sales carried their decline for the sixth month in July, falling by 5.9 percent on a monthly basis, to the lowest level since May 2020.
The number of people who applied for unemployment benefits for the first time decreased by 2 thousand in the week ending August 13 compared to the previous week and decreased to 250 thousand. Unemployment benefits, which fell contrary to market expectations, indicated that labor demand remained solid.
While the balance sheets from the retail sector are still being evaluated, Kohl’s balance sheet revealed that especially middle-income customers are under high inflation pressure.
While these developments do not change the indecision observed in the pricing in the money markets, the Fed is expected to increase interest rates with a 60 percent probability and 75 basis points with a 40 percent probability in September.
While the ongoing uncertainties strengthen the demand for dollar, the dollar index, which reached its highest level in the last month with 107.6 yesterday, is at 107.7 in the new day.
With these developments, S&P 500 index gained 0.23 percent, Dow Jones index gained 0.06 percent and Nasdaq index gained 0.21 percent in New York stock market yesterday. Index futures contracts in the USA started the new day with a decrease.
On the European side, annual inflation reached a record level of 8.9 percent in July due to the rise in energy prices, after the growth data fell short of expectations.
Construction production in the Eurozone decreased by 1.3 percent in June compared to the previous month.
While the expectations for the European Central Bank (ECB) to increase interest rates by 50 basis points in the next meeting continue, questions about whether the bank will become more hawkish in the face of the record-breaking inflation increase are increasing.
Yesterday, FTSE 100 index gained 0.35 percent in England, DAX 40 index gained 0.52 percent in Germany, CAC 40 index gained 0.45 percent in France and FTSE MIB 30 index gained 1 percent in Italy. Today, index futures contracts in Europe started the new day with sellers, albeit limited.
While a mixed course stands out in Asian stock markets today, the increasing recession concerns in the region are effective in the decrease in risk appetite.
Signs of a slowdown in the economy in China, the ongoing crisis in the housing market, the disagreement between the USA and Taiwan and the closures caused by the new type of coronavirus (Kovid-19) continue to increase the uncertainties in the country.
According to the macroeconomic data announced in the region, the Consumer Price Index (CPI) in Japan increased by 2.6 percent on an annual basis in July, surpassing expectations.
With these developments, Nikkei 225 index decreased by 0.07 percent in Japan, Shanghai composite index decreased by 0.21 percent in China and Kospi index decreased by 0.55 percent in South Korea, while Hang Seng index decreased by 0.2 percent in Hong Kong. gained value.
Domestically, after the Central Bank of the Republic of Turkey (CBRT) lowered the policy rate by 100 basis points to 13 percent yesterday, the BIST 100 index, which differed positively from the global stock markets by continuing its upward trend, continued to record records.
BIST 100 index, which carried its highest level record to 3.033.81 points yesterday, also improved its closing record by completing the day at 3.020.01 points, 1.34 percent above the previous close.
Dollar/TRY is trading at 18.0910 at the opening of the interbank market today, after closing at 18.0504 with an increase of 0.6 percent yesterday.
Analysts stated that retail sales in the UK and Producer Price Index (PPI) data in Germany will be followed today, and said that technically, 3.030 and 3.050 levels in the BIST 100 index may become resistance and 2.950 points may become support.
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