Statements from the Members of the Board of Directors of the European Central Bank (ECB) were followed closely during the session. First of all, ECB President Christine Lagarde stated that they are determined to bring inflation to the medium-term target of 2 percent and that they plan to increase interest rates further for this. Meanwhile, Board Member Gabriel Makhlouf said the bank will likely turn to smaller rate hikes if further rate hikes are needed next year. Subsequently, Board Member Peter Kazimir pointed out that recession risks have increased in the eurozone, but that interest rate hikes will continue to reduce inflation rates permanently. Thus, incoming messages left the door open for an increase of 75 basis points. On the other hand, we watch the markets pricing in that the ECB will raise interest rates by 50 or 75 basis points at its last monetary policy meeting of the year on December 15. On the other hand, Europe's attempts to reduce its dependence on Russia in the energy crisis, which is one of the most important causes of recession risks, continue. On the subject, it was announced that the ceiling price meeting for Russian oil, which was expected to be held by European Union (EU) diplomats, was postponed. Sources close to the subject stated that an agreement was expected in the meeting to take place, but the meeting was postponed because there was no consensus between the parties. At the weekend, Germany and France signed a joint declaration on strengthening cooperation in the field of energy.
The effects of the minutes of the Federal Open Market Committee (FOMC) dated November 1 - 2 continue to be limited in terms of asset pricing. At the November meeting, the bank brought its federal funds target to the range of 3.75 – 4.00 percent with a 75 basis point rate hike for the fourth time in a row. In the minutes, it was underlined that the authorities were very cautious about inflation risks, and it was stated that most of the members thought it would be appropriate to slow down the rate of increase in the near future. After these statements, while the relative weight on the dollar continues, we see that the resistance on the assets with high risk sensitivity, especially the stock market, is maintained with the rising investor risk appetite. However, the messages of Jerome Powell, the Chairman of the US Federal Reserve, who is expected to make a statement on Wednesday, will be critical. President Powell is expected to signal that he will continue with a 50 basis point increase after increasing interest rates by 75 basis points in four meetings in a row. However, he may also give the message that interest rates will increase next year, as inflation is still above the 2 percent target. Also yesterday, Cleveland Fed Chair Loretta Mester underlined that she thinks they are close to a break in tightening. In foreign policy developments, the meeting within the scope of the new START agreement between the USA and Russia was postponed to a later date by Russia. In addition, NATO Secretary General Jens Stoltenberg said that they will not back down and will continue to support Ukraine.
In the UK session, there were limited news flows that could enter the radar of market players with a degree of importance. British Prime Minister Rishi Sunak underlined that they will stand by Ukraine no matter how long the Russia-Ukraine war lasts, and stated that they will continue and increase their military aid next year. In addition, Prime Minister Sunak stated that the UK will stand against its rivals 'not with great rhetoric, but with a solid pragmatism'. On the other hand, local sources familiar with the matter indicated that the Bank of England (BoE) still has room for an aggressive rate hike at its monetary policy meeting on Thursday. As it will be remembered, at the November meeting, the bank had increased interest rates by 75 basis points.
Coronavirus-based news feeds in China are closely followed by market actors. According to the data reported by the National Statistics Office of China, 38 503 cases were announced in the last 24 hours in the country. The 7-day average has exceeded 27 000. Nearly three years after the start of the pandemic, as frustration grows over the zero Covid policy, signed by Chinese President Xi Jinping, a wave of protests unprecedented in the last ten years continues in its fourth day. However, sources close to the subject state that the measures can be expanded. On the other hand, the Chinese Ministry of Finance announced that they will extend the customs duty exemptions applied to some products imported from the USA until May 31 next year. In Japan, one of the leading countries in the region, statements came from policy makers. Bank of Japan (BoJ) Governor Haruhiko Kuroda said that the tightening labor market will help increase wages in the future, while he expects wage pressure to increase gradually. Japanese Prime Minister Fumio Kishida emphasized that it is important that the government and the BOJ work closely to ensure long-term price stability.
Bonds issued by governments or businesses for financing purposes are the most liquid debt instrument in international markets. In these securities, where the interest cycle is predominantly priced, the indicator is US 10-years, and its trend is projected to be inversely reflected in the buy-sell wave of relatively risky instruments in the markets.
Volatility indices are calculated based on the trading difference of options contracts where stocks are the underlying asset. If the index value is below 10 points, optimism is dominant in the markets and investors are willing to take risks, although the calculation in the range of 10-30 is considered the normal range, the stress begins to increase and if it is above 30 points, it is interpreted as pessimism is valid and there will be fluctuations in asset pricing.
As of the new week, the demand created by the fall in investor risk appetite for the dollar, as a safe haven, was limited. In this regard, the pricing of the expectations that the US Federal Reserve (FED) will decrease the monetary policy tightening rate at its December meeting and increase interest rates by 50 basis points, rather than 75, is the main factor. As a matter of fact, the dollar index also confirmed the bearish channel outlook with the strong resistance it encountered in the 50-period exponential moving average in its upward attempts. If the 105.30 support can end with the declines, the pullback may continue to 104.15 behind 104.75.
Despite the hopes that the FED will soften in tightening its monetary policy, the high probability of the European Central Bank (ECB) to continue with aggressive interest rate hikes in order to ease inflation pressures that have not yet peaked continues to create demand for the parity. Technically speaking, the parity seems to be defending the rising channel move. As long as 1.0250 support below doesn't end, the prevailing buying pressure could force the parity to test 1.0445 and then 1.0520. In possible declines below 1.0250, the 1.0180 support can be observed.
While the UK government is expected to announce new energy reform soon, we see that the demand for the pound is resilient. Technically speaking, it is seen that the parity is defending the third bullish wave with the Fibonacci fan line of 61.8 percent. If the resistance of 1.2085 can be overcome in the ongoing recovery, the gains could extend to 1.2250 after 1.2175. In possible declines, the 1.1935 – 1.1860 line will be the power collection zone.
In global markets, the US 10-year treasury yields deepened below 3.70 percent, while easing the pressure on the Japanese yen. On the other hand, the parity, which sees 3-month lows with the weak appearance of the dollar, may have the potential to decrease to 136.15 below 137.40 if it persists below 139.80. In a possible recovery above 139.80, 140.95 resistance can be followed.
The protests that emerged in the country against the expanded measures after the number of coronavirus cases broke the record in China, create demand for ounce gold as a safe haven in the markets. Technically speaking, it is seen that the ounce gold is defending the intermediate upward trend. As long as the 1740 level below is defended as a support, the commodity is highly likely to appreciate until 1771 after 1767. In declines below the reference 1740, the support of 1726 can be followed as a correction signal.
The coronavirus developments in China, the world's largest energy importer, continue to be the main pricing story for crude oil in international markets. Concerns that the protests against the measures expanded by the public authority, after the number of cases broke a record in the country, would harm the supply chains, reduced the crude oil to the previous levels of the war in Ukraine. At this point, the 81.50 resistance is extremely critical. As long as a closing below this level occurs, the risk of the commodity falling to 76.70 behind 77.85 may increase.
The US 10-year bond yields, which fell below 3.70 percent in the global bond market, are supporting the precious metals group while suppressing the dollar. Looking at the technical outlook, it is seen that the commodity received strong support from the 100-period exponential moving average (MA) in the declines. As long as the 20.95 level indicated by the 100 EMA does not end with permanent closures, the potential of the commodity to reach 22.00 following 21.65 will continue to reside in its contracts.
In the data announced by the German Federal Statistical Office (Destatis) last week, we saw the highest level of the DAX40 in 5.5 months, as the country's economy grew 0.4% in the third quarter, above the market expectations, returning from the brink of recession. However, with the new week, we observe that the index faced profit realizations due to the hawkish statements of the ECB members and the coronavirus developments in China that reduced the investor risk appetite. Technically, it is seen that the index is preparing for an intermediate rising wedge formation. If the 14 260 support can be ended with the declines, the corrective movement can continue up to 13 990 behind 14 135.
|Support||14 260||14 135||13 990|
|Resistance||14 530||14 660||14 795|
DOW30, at its 7-month high on November 25, was unable to maintain its gains and fell below the rising wedge due to the increase in global investor stress despite the weak dollar. Thus, while the RSI oscillator, known as the relative strength index, for the appearance of the index that signals the correction path, also produces a return signal, the 33 620 support will be in our close marking. In the declines below this level, 33 000 support can be followed behind 33 300. Above, the 34 170 – 34 450 line will continue to be a strong resistance zone.
|Support||33 620||33 300||33 000|
|Resistance||34 170||34 450||34 760|
In the new week, we have witnessed critical developments in the USA - China line. The bans on imports between the two countries affected the investor sentiment negatively, causing the stocks to lose momentum. On the other hand, hopes that the FED will be less aggressive in tightening monetary policy at its December meeting continue to support stocks. Under this outlook, if SP500, which continues its rise by decreasing to the 3rd wave, manages to recover above 4 004 points, it could target a 2.5-month high of 4 060 above 4 032.
|Support||3 950||3 922||3 895|
|Resistance||4 004||4 032||4 060|
Bitcoin continues to hover at 2-year lows as the FTX crisis lowered demand for the cryptocurrency market. As long as the 17 000 resistance above is not exceeded, leading Bitcoin's risk of falling to 15 415 below 15 920 will continue to be strong. In a possible transition above this level, 17 535 and 18 100 resistances can be observed.
|Support||15 920||15 415||14 890|
|Resistance||17 000||17 535||18 100|