While global markets maintain their positive outlook, the Monetary Policy Committee meeting of the Central Bank of the Republic of Turkey (CBRT) to be held today will be followed domestically.
Although the number of cases in the new type of coronavirus (Covid-19) epidemic worldwide exceeds 5 million and the number of deaths exceeds 327 thousand, the increase in the number of recovered patients and expectations that the worst is behind support the stock markets.
The upward trend in the New York stock market was influenced by the first quarter results of retail companies in the USA coming in better than expected. “Considering monetary policy, participants stated that the Fed is determined to use all its tools to support the US economy during this difficult period, thus supporting the goals of maximum employment and price stability,” the US Federal Reserve (Fed) meeting minutes said. The statement was one of the factors that strengthened the purchases in the stock market.
With these developments, the Dow Jones index gained 1.52 percent, the S&P 500 index gained 1.67 percent and the Nasdaq index gained 2.08 percent yesterday.
On the European side, the gradual removal of quarantine measures and the reopening of economies ensures that the upward trend continues. While the DAX index in Germany gained 1.34 percent yesterday and carried its rise to the 4th consecutive trading day, the FTSE 100 index in the UK made a premium of 1.08 percent and the CAC 40 index in France made a premium of 0.87 percent.
Following the positive trend in the US and European stock markets, a mixed trend is observed in Asian stock markets today. Although the manufacturing industry Purchasing Managers Index (PMI) announced in Japan continued its decline with 38.4, the service sector PMI recovered from 21.5 to 25.3. Near the close, the Nikkei 225 index in Japan decreased by 0.1 percent, while the Kospi index in South Korea gained 0.5 percent.
In China, concerns that tensions with the USA may escalate are putting pressure on the stock market. Shanghai composite index is currently at 2,878 with a 0.2 percent loss of value.
Domestically, the BIST 100 index, which reached the 103,000 point limit yesterday, closed the day at 102,157.53 points, with an increase of 0.17 percent compared to the previous close, although it gave back a significant part of its gains with profit sales that increased their effect at this level. Dollar/TL, which closed at 6.7913 yesterday, is traded at 6.7870 at the opening of the interbank market today.
Analysts stated that concerns that US-China tensions may increase with the statements of US President Donald Trump may cause pressure on global markets, and pointed out that US indices lost 0.4 percent in futures.
Stating that the upcoming statements by the USA and China on the subject are in the focus of investors, analysts said that in addition to the data to be announced, the CBRT’s interest rate decision in the country and the speech by Fed Chairman Jerome Powell will be followed abroad.
Analysts stated that a fluctuating course may be observed in the markets due to the influence of today’s intense data agenda, and stated that the 103,200 and 105,000 levels in the BIST 100 index are technically resistance.
The majority of economists who participated in the survey conducted by AA Finance predict that the CBRT will continue to cut interest rates today. While 15 of 17 economists expected a reduction in the policy rate (one-week repo auction interest rate), the median of the reduction expectations for the policy rate was 50 basis points. At the last MPC meeting on April 22, the policy rate was reduced by 100 basis points to 8.75 percent.
The Central Bank, which reduced the policy rate by 100 basis points at last month’s meeting, which was the highest market expectation, has reduced the policy rate by a total of 1525 basis points in eight consecutive meetings since July 2019, from 24 percent to 8.75 percent.
The data to follow in the markets today are as follows:
10.00 Türkiye, 1st quarter international investment position
10.30 Germany, May manufacturing and service sector PMI
11.00 Eurozone, manufacturing and services sector PMI for May
11.30 UK, May manufacturing and services sector PMI
14.30 Türkiye, May financial services confidence index
14.00 Türkiye, CBRT’s interest rate decision
15.30 US, weekly unemployment claims
15.30 USA, May Philadelphia Fed manufacturing index
16.45 USA, May manufacturing and services sector PMI
17.00 USA, April housing sales
Source: https://www.aa.com.tr/tr/ekonomi/yurt-ici-piyasalar-merkez-bankasina-odaklandi/1848556
