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Latest situation in global markets (May 24, 2022)

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Despite the concerns that central banks will have to resort to more aggressive interest rate hikes in the face of high inflation and that this situation will drag the economies into recession, the desire to recover in the stock markets came to the fore yesterday.

The increase in the risk appetite was effective when US Leader Joe Biden, who became the first Asian type after he took office in January 2021, signaled that he would reconsider the tariffs applied to China by the former Leader Donald Trump administration. On the other hand, expectations that the US Federal Reserve (Fed) could take a policy step to limit the decline in stocks and stabilized asset prices also reflected positively on investor decisions.

While the statements of Fed officials remain in the focus of the markets, Atlanta Fed Leader Raphael Bostic said that it may be logical to give the middle of the interest rate hike in September in order to price the impact on inflation and the economy, following the expected half-point rate hikes in the next two months.

JP MORGAN UPGRADED ITS INTEREST INCOME ASSUMPTION FOR THIS YEAR

With these developments, a buying trend was followed by the banking sector in the New York Stock Exchange yesterday and the Dow Jones index gained 1.98 percent, the S&P 500 index 1.86 percent and the Nasdaq index 1.59 percent. Shares of JP Morgan, Bank of America and Citigroup rose close to 6 percent, while those of Wells Fargo rose close to 5 percent after JP Morgan, one of the leading banks in the USA, raised its interest income forecast for this year. The dollar index fell to the 102 border yesterday, hitting its lowest level in nearly a month. The US 10-year bond yield, on the other hand, stabilized at 2.84 percent after rising from 2.78 percent to 2.86% yesterday.

Yesterday, European Central Bank (ECB) Leader Christine Lagarde stated that she expects the net purchases under the bond purchase program to end at the beginning of the third quarter, “This will allow for an interest rate hike at our meeting in July in line with forward-looking guidance.” she used the phrase. Lagarde’s statements, which pointed out that the interest rates could be turned into positive until September, supported the stock markets, while the DAX 30 index in Germany increased by 1.38 percent, the CAC 40 index in France by 1.17 percent and the FTSE 100 index in the UK by 1.67 percent. . Euro/dollar parity increased 1.2 percent yesterday and tested its highest level in about a month with 1.07.

On the Asian side, according to the data announced today, the leading manufacturing industry PMI in Japan decreased by 0.3 points to 53.2 in May compared to the previous month, while the PMI in the services branch recorded an increase. The data that the problems in real estate, one of the building blocks of the economy, continue in China, and the continuation of the epidemic measures, increased the fears of economic growth and had an impact on the stock markets turning negative today. With these developments, Asian stock markets followed a selling course this morning, while the Shanghai composite index in China decreased by 1 percent, the Nikkei 225 index in Japan decreased by 0.8 percent and the Hang Seng index in Hong Kong decreased by 1.6 percent. In Asian stock markets, the negative atmosphere created by the flurry of China’s growth was effective on the European and US index futures contracts.

DOLLAR EXCEEDED 16 TL

In Borsa Istanbul, where domestic volatility was high yesterday, the BIST 100 index closed the day at 2,380.90 points with a price benefit of 0.36 percent. Dollar/TL, on the other hand, was trading at 15.9760 at the opening of the interbank market today, after closing at 15.9316 with an increase of 0.2 percent compared to the previous closing level. It is currently trading at 16.0290 level.

Analysts said that concerns about inflation, growth and more tightening push investors to be cautious and said that volatility in the markets may remain on the agenda for a while.

Analysts stated that the statements of Fed Leader Jerome Powell and ECB Leader Christine Lagarde, as well as the news flow from the ongoing Davos Summit, will be in the focus of the markets, and that the Purchasing Managers Index (PMI) information to be announced around the world stands out on the data agenda.

Analysts stated that, technically, the BIST 100 index is at the level of 2.350 and 2.290, while the levels of 2,470 are in the resistance position.

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