Domestic markets are waiting for the Central Bank

While the number of people who lost their lives due to the new type of coronavirus epidemic in China exceeded 2 thousand, the number of confirmed cases in the country increased to 74 thousand 185, of which 11 thousand 977 were in serious condition.

Although the increase in the number of deaths and cases in the coronavirus epidemic has lost momentum, the effects of the epidemic on the global economy, especially on China, are now being discussed more loudly. International credit rating agency Moody’s, which reduced China’s 2020 growth forecast from 5.8 percent to 5.2 percent last week, warned in its yesterday’s report that the epidemic could slow down economic growth in the entire Asia-Pacific region.

Analysts stated that despite these developments, the sales pressure in the markets remained limited with the support of the main economic administrations and the continuing interest rate reductions of the central banks, and reported that the stock markets followed a mixed course with internal dynamics.

In the USA, yesterday, after Apple announced that it may not be able to reach its sales targets in the first quarter of the year, the Dow Jones index lost 0.56 percent and the S&P 500 index lost 0.29 percent, while the Nasdaq index finished the day just above the previous closing.

While the New York Fed manufacturing index announced yesterday increased more than expected and reached the peak of the last 9 months, indicating that the US economy maintains its strength, negative macroeconomic data continued to come from Germany.

The current situation and expectation indices for Germany published by the Center for European Economic Research (ZEW) were significantly below the forecasts.

After the data, depreciations were seen in the stock markets and the euro. Euro/dollar parity decreased by 0.35 percent yesterday, continuing its downward trend since the beginning of February, and hit its lowest level since April 2017 at 1.0786. The DAX index in Germany lost 0.75 percent, the FTSE 100 index in England lost 0.69 percent and the CAC 40 index in France lost 0.48 percent.

Today, a positive trend is observed in Asian markets due to the loss of momentum in the increase in the number of cases related to the coronavirus epidemic. While there is an increase in oil prices and stock markets, the ounce price of gold remains horizontal. Near the close, the Nikkei 225 index in Japan gained 1 percent and the Shanghai composite index in China gained 0.3 percent.

Domestically, the BIST 100 index, which declined yesterday in parallel with the decline in the US and European stock markets, completed the day with a decrease of 1.01 percent at 119,574.10 points. Dollar/TL, on the other hand, is trending horizontally at the opening of the interbank market today, after rising 0.3 percent yesterday and closing at 6.0670, parallel to the dollar’s appreciation against other currencies in international markets.

The dollar index, which is used to track the value of the dollar against the currencies of major developed countries, increased by 0.44 percent yesterday and reached 99.5, the peak of the last 20 months.

Analysts reported that the interest rate decision from the CBRT’s Monetary Policy Committee meeting will be followed today in the country and the minutes of the US Federal Reserve meeting abroad. Analysts stated that technically, the level of 118,200 in the BIST 100 index is support, and 121,000 and 122,500 are resistance, and noted that the levels of 6.07 and 6.10 in dollar/TL stand out as resistance.

Two-thirds of the economists who participated in the survey conducted by AA Finance expect the CBRT to continue reducing interest rates today. According to the survey, 7 economists do not expect any change in the policy rate (one-week repo auction interest rate), while 14 economists predict a 25-75 basis point interest rate cut.

The CBRT, which reduced the policy rate by 1200 basis points from 24 percent to 12 percent in the last 4 meetings of last year, continued the reduction in the first meeting of this year and reduced the policy rate to 11.25 percent.

The data to follow in the markets today are as follows:

12.30 UK, January Consumer Price Index and retail sales

14.00 Türkiye, CBRT interest rate decision

16.30 USA, January housing starts and construction permits,

16.30 USA, January Producer Price Index

Source: https://www.aa.com.tr/tr/ekonomi/yurt-ici-piyasalar-merkez-bankasini-bekiyor/1738114

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