Following the Fed’s interest rate decision and Fed Chairman Powell’s statements, global markets are experiencing a sell-off trend. While losses in US futures exceeded 1.5 percent, almost all Asian stock markets are in the negative. Powell’s statements that were not optimistic enough about the opening of economies after the epidemic and the profit-taking pressure on the stock markets, which have been on the rise for weeks, can be considered among the main reasons for today’s declines.
There is no important data flow on today’s agenda other than unemployment benefit applications in the USA. Weekly money and bank statistics will be followed domestically.
Borsa Istanbul opened in minus; dollar at 6.78
The dollar/TL exchange rate, which has continued to move at similar levels since the beginning of the week, started the day at 6.78 levels. Euro/TL is at the level of 7.69. In parallel with the sell-off trend in global markets, Borsa Istanbul BIST 100 Index opened at 109 thousand 150 points with a loss of 0.57 percent.
Oil prices fell after US stock data and Fed
Oil prices in international markets declined due to slow growth in demand, stocks reaching an all-time high in the US, and the Fed’s determination that it would take years to recover from the pandemic.
Analysts state that after prices have doubled since April, investors have now started to sell on negative news, and the increase in stocks shows that the road to recovery is bumpy.
Brent oil is trading at $40.50 a barrel, with losses of more than $1 compared to yesterday. US crude oil followed a similar movement at $38.31.
Powell: Recovery could take years
As expected from the FOMC meeting, the Fed decided to keep the interest rate in the range of 0-0.25 percent. All FOMC members voted to keep the interest rate unchanged. Fed officials predicted a 6.5 percent contraction in the economy this year and a 5.0 percent growth in 2021.
Fed Chairman Powell stated that they do not plan to increase interest rates and that the recovery in the economy is expected to begin in the second half of the year. Powell said May nonfarm payrolls data could be a signal that the worst may be over for the labor market.
Credit Suisse raises its forecasts for gold
Credit Suisse raised its price forecasts, predicting that low and negative yields, a weakening dollar, and expectations that governments’ fiscal stimulus will sooner or later lead to inflation will support gold prices.
Credit Suisse, which increased its average gold price forecast for the third quarter from 1,560 dollars/ounce to 1,750 dollars/ounce, also lowered its expectation for the fourth quarter from 1,600 dollars/ounce to 1,775 dollars/ounce.
Credit Suisse, which increased its average price expectation for 2021 from $1,600/ounce to $1,800, also made the assessment that “If US Treasury paper yields fall below the 100 basis point level, prices may exceed our estimates.”
Source: https://www.dunya.com/finans/haberler/fed-sonrasi-piyasalar-satista-haberi-472445
