Central Banks gave direction to the market

MDN Editör

The FED, the captain of reserve money, did not change interest rates and announced the policy rate at 5.50 percent

The emphasis on achieving the inflation target and the wait-and-see policy in the FOMC meeting minutes and Fed chair Powell’s speeches had an impact on pricing. Stating that the next step will not be an interest rate hike, but it is too early to start cutting rates, the veteran Fed governor drew attention to the labor market. Non-farm payrolls data, which has a high macroeconomic significance, came in at 175K, below both expectations and the previous level. US inflation data, which is at the center of global markets, fell in line with expectations with 3.4 percent. The unemployment rate increased by 3.9 percent. Average hourly earnings data failed to meet expectations with 0.2 percent. ISM manufacturing PMI and ISM non-manufacturing PMI data fell below the critical 50 level. Retail sales data, on the other hand, remained below both expectations and the previous level with 0.0 percent. The EURO-USD pair, which displayed a positive outlook throughout the month, continued to seek balance at the 1.0850 pivot level.

While a quiet month was left behind on the Asian front, there was intense  data flow in the European region and the UK

The UK central bank left the policy rate unchanged at 5.25 percent. In Q1, the UK economy grew by 0.2 percent on an annual basis, above expectations. Inflation in Germany, the locomotive economy of the European region, was announced in line with expectations with 2.2 percent. Inflation across the region remained unchanged at 2.4 percent. On the Asian side, the highly anticipated Chinese CPI data recorded a recovery with 0.3 percent. The Australian central bank, like other central banks, did not make any changes in the policy rate and announced it at 4.35 percent. 

İlginizi çekebilir:

Outlook for world’s central banks in 2020

There were sharp rises on the crypto side, especially the positive atmosphere created by the ETH spot ETF application process caused upward attacks. While BTC gained momentum towards the 72 thousand level, daily rises on the ETH side exceeded the 20 percent level and trials above 3700 were seen. AVAX, web 3 and artificial intelligence cryptocurrencies also saw sharp rises.

In domestic markets, while Borsa İstanbul continued to set new records,  foreign demand for TL denominated assets gained momentum

 The orthodox monetary policies implemented by the CBRT on rational grounds started to bear fruit. 

The ongoing positive atmosphere with the meetings held by the central bank and Minister Mehmet Şimşek, who implemented a tight monetary policy in the fight against inflation, caused the CDS level to fall below the 270 threshold. The news of Turkiye’s removal from the gray zone and the upward revisions in the outlook with rating upgrades from credit rating agencies prepared the ground for the demand for TL-denominated assets. While interest in government domestic debt securities and bonds issued by the private sector continued, the Borsa Istanbul continued to set new records. In particular, the positive reports prepared by foreign sources for the Turkish banking sector strengthened the upside potential of the index. Inflation data increased below expectations with 69.80 percent. Unemployment rate was announced below the previous level with 8.6 percent. Industrial production increased by 7.7 percent on a monthly basis.

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