Domestic focus turns to CBRT's monetary policy decisions

While the Fed's "dovish" signals for the first time in a long while at last week's meeting increased risk appetite in the markets, "hawkish" guidance from Fed officials throughout the week tempered that appetite.

Yesterday, Philadelphia Fed President Patrick Harker stated that the bank should begin lowering interest rates, though not immediately. Expressing that it is important to begin interest rate cuts, Harker also noted that there is no need to do so too quickly.

Analysts emphasized that market expectations for the Fed to take overly dovish steps may have been priced in too quickly, pointing out that forecasts regarding when the bank will begin cutting rates could disappoint investors.

Stating that investors may want to reduce their positions due to the approaching Christmas holiday, analysts also said that US economic growth data for the third quarter could increase volatility in the markets today.

In money market pricing, while it is considered a certainty that the Fed will keep interest rates steady at its first meeting next year, the probability of the bank beginning interest rate cuts in March has risen to 83 percent.

On the macroeconomic data front, the Conference Board Consumer Confidence Index in the US rose by 9.7 points on a monthly basis in December to 110.7, exceeding market expectations, which is interpreted as an indication that the Fed does not need to rush to lower interest rates.

The country's current account deficit decreased by 7.6 percent in the third quarter of the year to 200.3 billion dollars, recording its lowest level in nearly 2 years. Existing home sales in the US increased by 0.8 percent in November, coming in above market expectations.

In bond markets, while the downward trend continues, the US 10-year bond yield is at its lowest level since July at 3.85 percent.

Following these developments, the dollar index, which completed the day yesterday with a 0.2 percent increase at 102.4, is currently 0.1 percent below its previous close.

The ounce price of gold, which finished the day yesterday with a 0.5 percent decrease at 2,030 dollars, is trading at 2,037 dollars at the moment, up 0.4 percent from its previous close.

The barrel price of Brent oil, which ended its five-day winning streak yesterday by finishing the day with a 0.7 percent decrease at 79.1 dollars, is hovering at 79.2 dollars today, 0.1 percent above its previous close.

On the other hand, FedEx shares lost more than 12 percent in value yesterday after the company lowered its revenue expectations and its financial results came in lower than expected.

In the New York stock market yesterday, the Nasdaq index recorded a 1.50 percent decrease, the S&P 500 index a 1.47 percent decrease, and the Dow Jones index a 1.27 percent decrease. Index futures in the US also started the new day with a negative trend.

European stock markets followed a mixed trend yesterday.

Analysts stated that volatility in money market pricing increased as UK inflation slowed faster than expected, noting that risk appetite in the UK's FTSE 100 index has increased.

According to data released yesterday in the UK, the Consumer Price Index (CPI) remained below market expectations with a 3.9 percent increase on an annual basis in November, and the country's inflation fell to its lowest level since October 2021.

According to data announced by the UK's Office for National Statistics (ONS), annual inflation, which was 4.6 percent in October, stood at 3.9 percent in November, while the expectation was for it to be 4 percent.

Yesterday, while the MIB 30 index in Italy lost 0.01 percent and the DAX 40 index in Germany lost 0.07 percent, the FTSE 100 index in the UK recorded a 1.02 percent increase and the CAC 40 index in France recorded a 0.12 percent increase. Index futures in Europe started the new day with a mixed trend.

In Asian equity markets, a negative trend stood out, with the exception of China.

Analysts stated that the low risk appetite in US equity markets has also carried over to Asia, reporting that technology stocks led the decline.

On the other hand, the share price of Daihatsu Motor, a subsidiary of Toyota, fell sharply following news that its offices were raided due to the manipulation of collision safety test results and that it was recalling 1 million of its cars in the US.

Near the close, the Nikkei 225 index in Japan recorded a 1.7 percent decrease, the Hang Seng index in Hong Kong a 0.1 percent decrease, and the Kospi index in South Korea a 0.8 percent decrease, while the Shanghai composite index in China gained 0.3 percent in value.

Domestically, while the BIST 100 index in Borsa Istanbul, which followed a sales-weighted trend yesterday, finished the day with a 0.82 percent loss at 7,662.85 points, eyes today have turned to the CBRT's interest rate decision.

Analysts emphasized the importance of the guidance in the policy text alongside the decision on the policy rate, stating that signals received from here are likely to increase volatility in asset prices.

The Dollar/TL, after following an upward trend yesterday and closing the day 0.1 percent above its previous close at 29.1297, is trading at 29.1315 at the opening of the interbank market today.

On the other hand, economists participating in the AA Finance expectation survey regarding the CBRT's Monetary Policy Committee (MPC) meeting estimate that the bank will increase the one-week repo auction interest rate (policy rate) by 250 basis points to 42.50 percent.

Stating that in addition to the CBRT's interest rate decision, weekly money and bank statistics will be followed domestically today, and a busy data agenda, primarily economic growth in the US, will be followed abroad, analysts noted that from a technical perspective, 7,600 and 7,500 points are support levels for the BIST 100 index, while 7,700 and 7,770 levels are resistance positions.