The negative trend on the global markets is continuing due to the energy crisis, recession concerns and the restrictive policies of the central banks. As the dollar hovers at a 20-year peak, Borsa Istanbul’s positive divergence is attracting attention.
In addition to the energy crisis and fears of recession, a negative trend can be observed on the global markets, with the expectation that the central banks, especially the USA, will take further tightening measures.
Global macroeconomic data and developments in the energy sector continue to shape the markets.
The Supply Management Institute (ISM) services index rose 0.2 points on a monthly basis to 56.9 in August, the highest in 4 months, according to data released in the US yesterday.
While the said data provided a positive signal for the economy’s stance and fueled inflation concerns, the likelihood that the US Federal Reserve (Fed) would hike rates by 75 basis points at the Sept. 21 meeting was priced in at a 74 percent probability .
THE DOLLAR IS THE HIGHEST OF 20 YEARS
Inflation and fears of the ultra-hawkish Fed increased selling pressures in bond markets, while demand for the dollar continued to grow.
After a 20-year high of 110.7, the dollar index is now at 110.5, up 0.2 percent from the previous close.
OIL REcession Concern and the Dollar Effect
Although the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC+ group, which consists of some non-OPEC producer countries, announced they would cut production by 100,000 barrels on Monday in September, concerns about the course of the economy in Asia and Europe and the strong dollar depresses the price of oil.
While the price of Brent oil per barrel continued the downward trend for the second day, it is currently finding buyers at $91, down 1.7 percent.
ALSO GOLD AND COPPER FALL
While the dollar, which has been at its peak for the past 20 years, also influenced the decline of metals like gold and copper, gold prices are at $1,696 this morning, down 0.4 percent from the previous close. and the copper pound is at $3.45, down 1.3 percent.
With these developments, the S&P 500 index on the New York Stock Exchange fell 0.41 percent yesterday, the Nasdaq index fell 0.74 percent and the Dow Jones index fell 0.55 percent. On the New York Stock Exchange, the index futures contracts continue their turnover-weighted price, albeit with restrictions, on the new day.
EYES ON THE EUROPEAN CENTRAL BANK
As eyes in Europe turn to the European Central Bank’s (ECB) monetary policy decisions, due to be announced tomorrow, it shows investors have been cautious ahead of the decision.
As money markets price in the ECB raising interest rates by 75 basis points for the first time in history after record high inflation in the region, selling pressures are mounting in bond markets across the region.
On the other hand, as Europe’s energy crisis continues to weigh on economies, factory orders fell 1.1 percent in July, below expectations, data released in Germany yesterday showed.
Despite expectations of the ECB’s decision, the euro, which continued to weaken against the dollar with these developments, yesterday tested its lowest level in 20 years. The euro/dollar parity ended the day at 0.9905 after falling as low as 0.9864 yesterday.
With these developments, the FTSE 100 index in the UK rose 0.18 percent, the DAX 40 index in Germany rose 0.87 percent and the CAC 40 index in France rose 0.19 percent, while the FTSE MIB 30 index remained unchanged in Italy. In Europe, the new day of index futures contracts started on a decline.
NEGATIVE TRAVEL ALSO IN ASIA
A sell-oriented course is also predominant on the Asian stock markets.
According to macroeconomic data released in the region, China’s exports rose 7.1 percent in August, far below expectations, while the foreign trade surplus narrowed to $79.4 billion.
The ongoing drought in the country and the Covid-19 epidemic continue to weigh on production, while the People’s Bank of China (PBoC) is making significant efforts to protect the falling yuan against the dollar.
While the leading index of macroeconomic data released in Japan fell to 99.6, the Bank of Japan (BoJ) announced that it would lower 10-year bond yields towards 0.25 percent and the yen, which continues its downward trend. could intervene.
The dollar/yen parity, which closed yesterday at 142.8, up 1.6 percent, is now at 144, up 0.9 percent.
With these developments, Japan’s Nikkei 225 index fell 0.7 percent, South Korea’s Kospi index 1.5 percent, Hong Kong’s Hang Seng index 1.7 percent and China’s Shanghai Composite index 0.1 percent.
BORSA ISTANBUL POSITIVE DISCONNECTED
The domestic stock markets, on the other hand, continue to differ positively from the global stock markets.
The BIST 100 index on Borsa Istanbul ended the day yesterday at 3,391.38 points, up 0.98 percent, hitting its highest-ever daily close while also hitting its highest at 3,448.93 points. The total transaction volume was at a record level of 122.9 billion lire.
Dollar/TL is trading at 18.2370 to open the interbank market today after closing flat at 18.2245 yesterday.
Analysts explained that the data agenda is calm today on the domestic market, with euro-zone growth, US trade deficit and the Fed’s beige book report being followed. (AA)
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