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Fundamentals

18.01.2022

Europe

European Central Bank (ECB) member Isabel Schnabel said that the impact of any tightening in monetary policy on the economy will be seen much later, noting that raising the interest rates of the Eurozone will not bring down rising energy prices. On the other hand, in Germany, which is the locomotive economy of the region, coronavirus cases continue to be high. While 33 129 positive cases were announced in the country in the last 24 hours, the 7-day average approached 70 000. Health Minister Karl Lauterbach said that the occupancy rate in intensive care units due to the Omicron is alarming and that the coming weeks will be quite challenging for Germany. In foreign policy, it was important that German Foreign Minister Annalena Baerbock, after her visit to Ukraine, stated that some steps could be taken towards the Nord Stream 2 pipeline project if Russia invades Ukraine. On the other hand, Josep Borrell, High Representative of the European Union (EU) on Foreign Relations and Security Policy, said that the EU is ready to respond directly to any attack on the Russia – Ukraine issue, but they prefer the path of dialogue and negotiation. Finally, the EU removed Australia, Canada, and Argentina from the list of countries that may be exempt from travel restrictions imposed due to Covid-19.

US

Due to the fact that the US session was during a public holiday, there was limited news that could enter the markets' radar. New York Fed President John Williams said that bank officials took steps to remove support for the economy during the pandemic and that the next step will be a rate hike, adding that the balance sheet will not be expected to shrink for too long. Meanwhile, San Francisco Fed President Mary Daly said that they should adjust policy to ensure success in price stability, noting that the bank wants to increase policy rates slightly and take the economy under control.. In addition, it was important for the Fed to announce that it made a profit of $ 107.8 billion in 2021 due to the impact of the bank's balance sheet rising to a record high during the pandemic and continuing to support the economy. On the other hand, coronavirus cases continue to be high in the United States. 337,884 cases were announced in the country in the last 24 hours and pandemic conditions are at a critical level. director of the National Institute of Allergy and Infectious Diseases (NIAID) noted that it is too early to say that the Omicron variant will bring an end to the pandemic, and the search for vaccines that can be effective on all variants should continue.

Britain

The number of ongoing high-reporting cases of coronavirus in the UK is tracked in terms of the course of a pound. While 70 160 positive cases were announced in the country in the last 24 hours, the 7-day average is still above 100 thousand. Government officials expressed that they will adhere to the measures of plan ‘B’ in force on this issue. In addition, according to a study by the Public Health England (PHE), people who have had an infection and had their 3rd shot were carefully monitored to suggest that they are up to 90 percent protected against coronavirus even after 12 months. On the other hand, it was noted that news sources close to the issue noted that the number of citizens who have difficulty in paying their energy bills in the country may soon triple.

Asia

During the Asian session, President Xi Jinping's speeches at the Davos Summit, which was held online, were at the forefront in China.. President Jinping expressed full confidence in China's economic development, saying that the overall momentum of the economy is solid. He also noted that the “Cold War” mentality should be abandoned, noting that countries should work together in the pandemic, economic development, and the fight against the climate crisis. In addition, Liu Guiping, Deputy Governor of the Central Bank (PBoC), warned that China faces an increased supply chain risk and that there are growing concerns about rising inflation and tight monetary policies. On the other hand, in Japan, BoJ kept the interest rate at minus 0.10 percent in line with market expectations at its first monetary policy meeting of the year. Meanwhile, Finance Minister Shunichi Suzuki said that through close dialogue with the markets, they will try to steadily issue government bonds in the amount of 215 trillion yen in the next fiscal year.


Indicators

MSCI iShared ETF’s

Msciisharedetfs
MSCI iShared ETF’sDownload Image

MSCI ETF indices are used for measuring the performance of a stock market located within a certain region. Prior to take any actions regarding the relevant region, stock market investment funds follow up the ETF yields and risk measurement.

Volatility Indices

Volatilityindices
Volatility IndicesDownload Image

The VIX, also known as the fear index, is calculated based on the difference between the buy and sell prices of the options contracts where the stocks in the S&P500 index are the underlying assets. If the index value is below 10 points, it means that there is optimism in the markets and the investors are eager to take risks, the pessimism starts to increase slightly even if it is considered as the normal range when it is in the range of 10 – 20. When VIX is in the range of 20 – 30, it means that the stress in the markets has started. A score of over 30 means that the investors’ desire for risk-taking is under pressure and asset prices will fluctuate.


US Index

USIndex

With the mixed outlook of developed country currencies in international markets, the dollar index limited the recovery at the 50-period exponential moving average passing by the 5-day high. However, while inflation expectations for the world's largest economy are rising, the dollar, whose real yield decelerates in the negative zone among the currencies of developed countries, creates a potential for sales in the index. As a matter of fact, if it can break 95.00 below with the loosening of the index starting from 50 EMA, it can deepen its losses to 94.40 below 94.70. In possible test increasing 50 EMA, 95.65 will work as a strong resistance.

Support95.0094.7094.40
Resistance95.6595.9596.30

Parities

EURUSD

Due to the fact that the US markets are on a public holiday, there were limited transactions in dollars. However, while the rally in natural gas prices in Europe seems to have ended, the expectation prevails that inflation pressures will also decrease in the coming period. European policymakers are turning towards a hawkish tone, while the euro has ended its downward trend against the dollar. In terms of confirmation of the trend change, transactions in favor of the euro may last to 1.1530 above 1.1465 in case of permanency to be achieved above 1.1345. In case of possible falls, 1.1285 and 1.1220 can be followed.

Support1.13451.12851.1220
Resistance1.14651.15301.1600

USDTRY

In the data announced by the Banking Regulation and Supervision Agency (BRSA) in recent days, short positions of the state-owned banks in foreign currency are interpreted as the government is putting pressure on the exchange rate. However, Turkey's country risk premium, which is hovering above 500 basis points in the CDS market, may create a wave of accumulated loss of value in TRY. At this point, 14.0000 is significant. In case of attacks above this level, purchases may gain momentum to the 14.2800 level. On the other hand, the exchange rate is unlikely to start on a downward path unless the channel movement ends. In this case,, 13.1000 and 12.8000 supports may be followed.

Support13.100012.800012.4800
Resistance13.690014.000014.2800

GBPUSD

The UK economy became one of the first countries in the G-7 to return to the pre-pandemic level. The purchases that this brings to the pound are also supported by the expectation that the Bank of England (BoE) will go for further interest rate hikes as of the new year. As a matter of fact, parity pricing, which left the 3rd week on its rise, can also focus on 1.3750 and 1.3810 above 1.3690 resistance. On the other hand, 1.3580 and 1.3525 supports can be followed in possible falls.

Support1.35801.35251.3465
Resistance1.36901.37501.3810

USDJPY

The pair had declined to 113.50 but had been unable to become permanent last week. Within the new week, US treasury yields began to create pressure again on the safe-haven assets, maintaining the major appearance in the pair, they began to move upwards. If 115.20 is broken at the first stage, the minor wedge can be terminated and the reactions can create the opportunity to reach 116.00 after 115.60. On the other hand, the 114.00 – 113.55 range can also be considered as a support zone for further hikes.

Support114.45114.00113.55
Resistance115.20115.60116.00

Commodities

XAUUSD

The fact that the interest rates on 10-year US bonds in the market of debt instruments reached the highest level since January 2020 with 1.80 percent also negatively affected the demand for gold.If the precious metal, which started to decline from the highs of 10 days, can break 1808 and target 1800 level indicated by Fibonacci 61.8 level. Above, 1829 resistance remains decisive.

Support180818001789
Resistance182918371850

USOIL

While the view that the impact of the Omicron variant on the energy market will be limited spread widely, the rise in global inflation expectations continues to drive demand for crude oil forward along with concerns that production will be insufficient. Crude oil, which is preparing to complete its 1st month of growth, reached its highest level since November 2021, while it can target resistance of 85.45 followed by 86.65 in its permanence above 83.00. In case of loosening below the 83.00 level, 81.70 and 80.50 can be followed.

Support83.0081.7080.50
Resistance85.4586.6588.00

XAGUSD

The appearance of the dollar in international markets limited the upward price of silver, which is one of the important members of the precious metals group. However, the low course in global investor risk appetite is a strong downward element in terms of silver pricing. Technically, if the commodity, which uses the upper boundary line of the descending channel in its upward movement as a strong resistance and starts to decline, can break 22.60 and decline to 22.30 and 22.00 If there is a possible transition above the channel, 23.50 and 23.80 may be raised.

Support22.6022.3022.00
Resistance23.2023.5023.80

Indices

DAX40

In Germany, the global minimum corporate tax will be changed to 15 percent, bringing sales to DAX40 contracts; however, decreasing natural gas prices' effects on German companies' will start purchases in the index. Based on this, if the index, which is settled above the 100-period simple moving average, completes the minor wedge by breaking the psychological resistance of 16 000, it will focus on 16 120, indicating the continuation of the trend. Below is the value of the Fibonacci retracement zone, 15 800 – 15 675 range, which will be on our radar.

Support15 80015 67515 530
Resistance16 00016 12016 240

S&P500

In the SP500 index, the weak real yield of the dollar is working as an important factor. Technically, if 4 700 is broken in the index above Fibonacci 50.0 percent fan line, 4 739 can become the target position in the Wave 1 bullish zone. In case of losses, the line of 50.0 percent indicating 4 605 level will be on our radar.

Support4 6054 5764 540
Resistance4 6704 7004 739

Cryptos

BTCUSD

FED Chairman Powell announced that the digital asset report will be published soon, while the pressure to sell Bitcoin, which leads the cryptocurrency market with the interest rate hike signals of developed countries, continues. As long as 45 000 level is maintained as resistance, the downward potential will prevail in the pricing of Bitcoin, 40 460 can be followed by 38 920 and 37 340 supports. On the other side, 46 830 will be on our radar above 45 000.

Support40 46038 92037 340
Resistance43 56045 00046 830

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