Gold and dollar prices continue to fluctuate due to high inflation, statements by the US Federal Reserve, ongoing tensions related to the Russia-Ukraine war and uncertainty caused by the coronavirus epidemic in China. While the dollar remained sluggish in the general scenario, gram gold prices declined due to pressure on ounce gold prices. The selling price of gold per gram lost 1.08 percent this week, the dollar/TL rose 0.86 percent and the euro/TL gained 0.54 percent.
While global equity markets traded on a high-volume course all week amid hawkish guidance from Federal Reserve (Fed) Chair Jerome Powell and Fed members, eyes turned to the intense data agenda, particularly US growth , next week. Following rising inflation in the US, increasingly hawkish directions from Fed members are further increasing asset price volatility.
All Fed members who expressed their views on monetary policy during the week said they took a positive approach to May’s 50 basis point rate hike, while Fed Chair Powell gave the green light for a 50 basis point hike in one or more Sessions reduced risk appetite. In his statements during the week, Powell pointed out that inflation is already very high and monetary policy is still supportive compared to before, and that it was appropriate to act a little faster.
Known for his hawkish stance, St. Louis Fed Chairman James Bullard stressed that the Fed should take more drastic steps, saying the 75 basis point rate hike has happened before and it’s not the end of the world.
STATEMENTS BY FED OFFICIALS ARE PAID
According to the Fed officials’ statements, bond market pricing started with a 50 basis point rate hike in all four meetings scheduled through September.
With the increased selling pressure in the bond markets, US bond yields in almost all maturities rose to the highest level in the last three years. As commodity prices came under selling pressure from hawkish central banks, Brent oil fell 4.3 percent on a weekly basis to $106 per barrel, while gold fell 2.1 percent to $1,932 an ounce.
STRONG COMPANY PROFITABILITY IN THE US CANNOT STOP THE PRESSURE TO SELL
While corporate profitability mostly beat expectations in the earnings season, which has intensified in the US this week, equity markets ended lower for the third straight week with the Fed hawking. Next week, eyes will be on the intense data agenda, particularly Q1 Gross Domestic Product (GDP) to be released on Thursday.
Analysts reported that 5-year inflation expectations, one of the key indicators the Fed considers when it comes to inflation, hit the highest level since 2014.
Analysts said that investors’ inflation expectations for 2027 have risen to 2.6 percent and that the realization of the said increase, despite the Fed’s already quite hawkish stance, makes investors even more nervous.
Analysts said that while profitability on US-announced corporate balance sheets mostly beat expectations, the impact of these developments on pricing has taken a backseat to dovish comments from Fed members.
According to macroeconomic data released in the US this week, the manufacturing purchasing managers’ index (PMI) rose to 59.7, while the services PMI fell to 54.7.
With these developments, the S&P 500 index fell 2.75 percent on a weekly basis, the Nasdaq index 3.83 percent and the Dow Jones index 1.86 percent.
On the data calendar for the week beginning April 25 are the Chicago National Activity Index and Dallas Fed Manufacturing Index on Monday, Durable Goods Orders on Tuesday, Richmond Fed Industrial Index and New Home Sales on Wednesday, Wholesale Inventory and Pending Home Sales on Wednesday, and the personal incomes on Friday personal spending and Michigan consumer confidence index data are tracked.
IN EUROPE, THE ECB MAY INCREASE INTERESTS BEFORE YEAR-END
While European equity markets are on a selling trajectory amid declining global risk appetite, the Russia-Ukraine war and the hawkish stance of the European Central Bank (ECB) remain the main risk factors for equity markets.
ECB President Christine Lagarde indicated in her statements during the week that the bank could raise interest rates before the end of the year, while asset purchases are likely to be completed by the end of the third quarter.
Lagarde explained that there are structural differences between the European economies and the US economy and that the two economies are moving at different speeds, saying they will monitor future macroeconomic data to make a decision on rate hikes.
Europe’s consumer price index (CPI) rose 7.4 percent on an annualized basis, according to inflation data released in the region during the week.
The euro/dollar parity carried the downtrend for the third straight week, ending the week at 1.0800, down 0.2 percent.
This week, the FTSE 100 index in England fell 1.24 percent, the DAX index in Germany fell 0.15 percent, the CAC 40 index in France fell 0.12 percent and the MIB 30 index in Italy fell 2.3 percent.
Next week will be followed on Monday by the ifo Business Environment Confidence Index in Germany, the Consumer Confidence Index in the Eurozone, the CPI in Germany and Q1 GDP in the Eurozone.
VIEW OF BOJ IN ASIA
On the Asian side, equity markets were a mixed bag this week as results from the Bank of Japan’s (BoJ) monetary policy board meeting on Thursday put investor focus.
While the BOJ is not expected to change interest rates, the text of the decision and post-meeting guidance will be looking for clues on future monetary policy after the dollar/yen parity hit its highest level for the year in the last 20 years, inflation that gradually started to rise in the country and global central banks that peddled.
While the ongoing novel coronavirus (Covid-19) epidemic continued to be the main risk factor in China, the fact that the People’s Bank of China (PBoC) did not cut its lending rates contrary to market expectations increased selling pressures in Chinese stock markets.
Although the Chinese economy grew 4.8 percent in the first quarter of the year, beating expectations, the impact of the restrictions applied during the Covid-19 outbreak on the economy was evident in retail sales data. Retail sales in the country fell 3.5 percent annually in March, well below estimates.
In the second half of the week, while the restrictions that have been in force in China for some time due to the outbreak of Covid-19 are gradually being eased, a certain number and priority employees of the company are allowed to go to work.
While investors feared no decision to cut lending rates at the PBoC’s midweek meeting, Chinese authorities’ call for big investors to buy shares eased selling pressure in equity markets, albeit partially.
Analysts said these developments in China continue to worry investors and keep selling pressures in Chinese markets.
The dollar/yen parity continued its upward trend for the seventh straight week, ending the week at 128.6, the highest in 20 years, up 1.7 percent.
According to macroeconomic data released in the region during the week, Japan’s CPI rose 1.2 percent annually, in line with expectations.
With these developments, Japan’s Nikkei 225 Index rose 0.04 percent and South Korea’s Kospi Index rose 0.3 percent on a weekly basis, while China’s Shanghai Composite Index rose 3.87 percent and Hong Kong’s Hang Seng Index rose 4 percent . 09 written off.
The data calendar for the week beginning April 25 tracks data on unemployment in Japan on Tuesday, industrial profits in China on Wednesday, retail sales and industrial production in Japan on Thursday. Markets in Japan are closed on Friday for a public holiday.
UP TO 100 INDEX RECORD RECORD, HIGH TREND ENDED
Although the BIST 100 Index on Borsa Istanbul peaked at 2,562.28 points domestically, it ended the week down on Friday due to increased selling pressure in US stock markets.
Analysts pointed out that expectations for corporate profitability in the fiscal period that started this week are strong and will strengthen next week, and said corporate volatility on Borsa Istanbul could increase.
Analysts stated that the Central Bank of Turkey (CBRT) inflation report to be released on Thursday would also be closely followed by investors, saying it would benefit investors to be cautious as the contract is on the BIST 30-30 Index is based on the futures and options market (VIOP) with upcoming maturity in April.
On Borsa Istanbul, the BIST 100 index ended the week at 2,472.50 points, down 0.88 percent, while the dollar/TRY ratio rose 0.73 percent to 14.7427.
Analysts noted that technically 2,400 points are being tracked as support and 2,500 points are tracked as resistance in the BIST 100 index.
Next week to be followed are Real Sector Confidence Index, Capacity Utilization and Industry Confidence Indexes on Monday, Economic Confidence Index on Thursday, Manufacturing PMI on Friday and External Trade Balance data.
Last 10 days for gram gold and dollar price! 
Increase in civil servants, workers and pensions…
Outrageous price difference!
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