Macroeconomic data continues to prioritize uncertainties regarding world economies. While the expectations that the US Federal Reserve (Fed) could raise interest rates more than anticipated to reduce inflation during the week weakened the risk appetite, the Bank of Japan’s (BoJ) widening of the yield curve target band caused bond yields to rise worldwide. US 10-year bond yields rose by about 25 basis points this week, and Germany’s 10-year bond yields rose 20 basis points weekly. Analysts noted that these developments increased the risk perception around the world and put pressure on global stock markets. The barrel price of Brent oil closed the week with an increase of 6.1 percent at $ 84.4, with signs that macroeconomic data could support oil demand. The ounce price of gold, on the other hand, gained 0.4 percent weekly, closing just below $1,800. Uncertainties increased in the USA While the US stock markets followed a mixed course this week, the announced macroeconomic data made pricing difficult. While the housing sector in the country continues to slow down, other areas of the economy continue to give different signals. The third quarter growth data, which was announced as 2.9 percent in the first estimates, was revised to 3.2 percent within the week. Weekly unemployment claims in the country were also below expectations with 216,000. Consumer confidence index in the country reached its highest level in 8 months with 108.3 in December. In this period, inflation expectations fell to 6.7 percent, the lowest level since September 2021, while second-hand housing sales in the country carried their decline to the 10th month in November with the effect of high housing loan rates. Accordingly, housing starts in the USA carried their decline for the third month with 1 million 427 thousand in November. Construction permits also decreased by 11.2 percent in November, to the lowest level in 2.5 years. On the other hand, the weak course of retail sales, which was expected to increase before the Christmas holiday, negatively affected the shares in the consumption sector. In the New York stock market last week, the S&P 500 lost 0.20 percent and the Nasdaq index lost 1.94 percent, while the Dow Jones index rose 0.86 percent. The data calendar for the week, which starts on December 26, will track wholesale inventories on Tuesday, Richmond Fed industrial index, Dallas Fed manufacturing activity index and pending home sales on Wednesday. Stock markets in the US will be closed on Monday for a holiday. Stock markets in Europe are expected to follow a calm course While the European stock markets followed a buying trend, albeit limited, last week, the regional stock markets are expected to follow a calm course next week. With the agreement of the European Union (EU) member countries to apply a ceiling price to natural gas, natural gas futures contracts traded in the Netherlands continue to decline, while Russia has not yet taken any concrete steps on the subject. While the consumer confidence index improved for the third month in a row in the Euro Area, the Producer Price Index (PPI) in Germany fell by 3.9 percent in November, more than expected. Germany’s decision to provide a total of 49 billion Euros of public support to companies affected by the energy crisis and a total of 28 billion Euros to renewable energy investments was at the center of the agenda. The package was recorded as the largest rescue package in German history. The UK economy contracted by 0.3 percent in the third quarter. Worsening indicators for the British economy have deepened recession concerns for next year. While this situation increased the uncertainties regarding monetary policies across Europe, the messages from the authorities that the European Central Bank (ECB) would continue to increase interest rates by 50 basis points remained on the agenda. With these developments, the FTSE 100 index in the UK increased by 1.92 percent, the CAC 40 index in France by 0.81 percent, the DAX index in Germany by 0.34 percent and the MIB 30 index in Italy by 0.35 percent. While there is no data to be announced across the region next week, markets will be closed on Monday for a holiday. In the UK, there will be no transactions on Tuesdays and Fridays due to holidays. BoJ’s bombing messed up in Asia While the Asian stock markets followed a sales-heavy course excluding the Hong Kong stock market, the BOJ’s widening of the bond rate targets affected all asset prices, especially the bond markets around the world. While the BOJ kept the policy rate unchanged at minus 0.10 percent, it increased the range used by Japan for yield curve control in the 10-year bond yield by 25 basis points. After the decision, Japan’s 10-year bond yields tested the level of 0.45 percent. Analysts stated that the decision in question indicates that the bank may change its monetary policy stance after the pressure on prices. While the People’s Bank of China (PBoC) kept the 1-year lending rate constant at 3.65% during the week, the ongoing new type of coronavirus (Kovid-19) epidemic in the country causes the risk perception to remain strong. With these developments, the Nikkei 225 index in Japan decreased by 4.69 percent, the Shanghai composite index in China by 3.85 percent and the Kospi index in South Korea by 1.99 percent on a weekly basis, while the Hang Seng index in Hong Kong decreased by 0.73 percent. rose. In the data calendar of the week starting with December 26, industrial profitability in China on Tuesday and industrial production in Japan on Wednesday will be followed. Borsa Istanbul continues to break records In the domestic market, BIST 100 index increased by 4.61 percent on a weekly basis, breaking the weekly closing record with 5,454.79 points, and brought the highest level it had ever seen to 5,515.67 points. The Central Bank of the Republic of Turkey (CBRT) left the policy rate unchanged at 9 percent last week. Dollar/TL closed the week at 18.6819, 0.15 percent above the previous weekly closing. Analysts said that in the BIST 100 index, technically, 5.500 and 5.550 levels can stand out as resistance and 5.400 and 4.380 points as support. In the next week, real sector confidence index and capacity utilization on Monday, economic confidence index on Thursday, CBRT’s meeting minutes and foreign trade balance data on Friday will be followed.
A professional writer by day, a tech-nerd by night, with a love for all things money.