European session closed in the shadow of calm news and macroeconomic data flows. European Central Bank (ECB) member Ignazio Visco said that European Union (EU) member states should consider setting up a debt redemption fund to manage public debts accumulated during the Covid-19 pandemic, while another board member Pierre Wunsch said that the rise in inflation is temporary and the bank is flexible about incentives. In addition, the European banks to increase financial and human resources to improve their operations on the continent. On the other hand, at a summit of EU leaders in Brussels, with the EU Commission due to rising energy prices was requested to examine the functioning of gas and electricity markets. In the macroeconomic calendar, according to the data of the European Commission, the consumer confidence index in the Eurozone was minus 4.8 points, above market expectations which are minus 5 points in October.
In the United States, where international markets are the focus, the issue of the debt ceiling and Biden's spending plan remain at the top of the agenda. During the session, the Speaker of the US House of Representatives Nancy Pelosi said that the House is on track to reach an agreement on the budget arrangement by the end of the week, while Democratic Senator Joe Manchin said that negotiations are ongoing and they are still talking to the White House, adding that he believes that lawmakers are approaching the top line in the spending bill. On the other hand, it was critical Fed to announce that it would ban regional bank heads, policymakers, and other senior officials from buying individual stocks and bonds. Meanwhile, Board Member Christopher Waller underlined that the bank's reduction in asset purchases is in line with the economic outlook, while another Board member Randal Quarles stressed that the bank needs more time before starting to think about raising interest rates. According to the data released by the US Department of Labor, in the macroeconomic calendar, jobless claims were announced in the week ending on October 16, 290 thousand people below expectations of 300 thousand, and fell to the lowest levels of the pandemic period. Also, according to the data, Philadelphia manufacturing index in October was 23.8 points, which is behind market expectations of 25 points. Finally, in the data of the National Association of Realtors (NAR), existing-home sales were announced as 6.29 million, which is above market expectations of 6.09 million in September.
The announcement of the new coronavirus mutation attracted attention during the British session, where expectations that the Central Bank (BoE) will go to a rate hike were mainly priced in. The Minister of Health, Sajid Javid, added that while they had detected a new version of the delta variant, type AY4.2, and informed that it had spread in the country, there was no reason yet to think it posed a major danger. Meanwhile, according to the Ministry of Health data, 48 545 new cases have been announced in the country in the last 24 hours, while 179 people have reportedly lost their lives. On the other hand, British Prime Minister Boris Johnson, as a result of his commitment, said that there is a problem that they need to solve related to the Northern Ireland protocol and that they need to act fairly quickly.
During the Asian session, news from China, the region's locomotive economy, was at the forefront. This was followed by Yi Gang (PBoC governor) saying that maintaining normal monetary policy and keeping the interest rate margin within a reasonable December would help encourage banks to better serve the real economy. On the other hand, the Chinese Ministry of Commerce stated that the United States and China should work together to create the conditions for the full implementation of the Phase 1 trade agreement. In addition, the National Development and Reform Commission of China announced that they want energy consumer sectors to increase their energy efficiency to reduce carbon emissions. The consumer price index (CPI) in Japan, one of the leading countries in the region, increased by 0.2 percent compared to the previous month in September, according to the Statistics Bureau of Japan (SBJ), pointing to 0.4 percent year-over-year, reflected in news sources that the Bank of Japan (BOJ) is considering ending the emergency loan facility for the pandemic period from March, if the number of cases continues to decrease. On the other hand, in New Zealand, the government said that a free trade agreement was signed with the United Kingdom. In Turkey, the October meeting of the Central Bank of the Republic of Turkey (CBRT) was decisive in the pricing of TRY assets. Despite the expectation of the markets on a discount by 50 basis points at the meeting, the Monetary Policy Committee (MPC) reduced the policy interest rate by 200 basis points to 16 percent. xx xx
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.
Developed country currencies in international markets have largely followed a mixed course with inflation and inflation expectations, followed by eases in the dollar index. However, we do not believe that the decline in the index will be permanent due to the value effect of 5-year US bond rates, which recovered the 10-month losses. In this regard, the 93.35 – 93.10 range will be able to work as strong support in the retracements, while 94.20 and 94.50 resistances above 93.95 will continue to be on our radar depending on the protected bullish potential.
In Germany, the locomotive economy of Europe, the establishment of a government is approaching, while the recovery in euro continues. Technically, the pair will continue to be bullish as long as it stays above the 100-period EMA. If it exceeds 1.1660, 1.1685, and 1.1715 indicated by the Fibonacci 50.0 percent retracement line will be on our radar. Below 100 EMA, 1.1570, and 1.1540 levels will be on our radar.
Expectations that the Bank of England (BoE) will raise interest rates continue to be effective. Based on this, the pair, which settled in the ascending path and headed for value gains, will follow 1.3880 and 1.3925 resistance levels above 1.3830 resistance on the new trading day. In the case of retracements, the 50-period simple moving average, which breaks 1.3725 below 1.3760, can work as support.
The fact that the dollar lost some strength in global markets paves the way for retracements in the pair.. On the other hand, pressure is also continuing on yen assets as the general election approaches in Japan. In this sense, the 113.50 – 113.15 range will be on our radar in downward movements. On the other hand, 114.40 and 114.70 levels are still important as potential resistance levels.
The 10-year US treasury yields, which reached 1.68 percent in the debt market and tested the highest level since May, continue to have a negative impact on the price of gold. Technically, in the yellow metal, which we predict will be dominated by sales pressure unless 1795 is exceeded; if we see the precious metal going below 1780, we will follow 1772 and 1764. In case of rises above 1795, 1802 and 1810 will stand out.
Although the announcement of the Philadelphia Fed manufacturing index below market expectations in the US session slightly pushed crude oil prices back, the fact that stocks are back on a downward trend in the US, which is one of the major producers, keeps pricing on an upward path. In particular, as long as 80.00 support, which is the psychological boundary line, is not broken downwards, 82.90, 83.85, and 85.00 resistances will be our targets. If it gets below 80.00, we will follow 78.85 in short positions.
In silver, which ended its descending trend by finding support from stagflation concerns in the markets, the high course of risk appetite causes some momentum losses. 23.70 – 23.50 range can be considered a retracement range, yet we will not evaluate it as a decline unless the 23.50 level is broken. However, exceeding 24.40 resistance due to the protected bullish path can also start a movement to 24.65.
Natural gas prices, which remained high in the European session, are weakening in the DAX40 index due to concerns that it may adversely affect the profitability of companies. As a result of this, if 15 445 is broken, a decline to Fibonacci 50.0 percent retracement line indicating 15 225 will be possible after 15 330. On the other side, 15 625 continues its role as a strong resistance.
|Support||15 445||15 330||14 225|
|Resistance||15 625||15 720||15 840|
In the United States, which is a guide for global markets, negotiations are also underway on Biden's spending plan, which has fallen to the range of $ 1.7 – 1.9 trillion while the debt ceiling crisis was solved for a short time. With the purchases brought about by this, the index, which maintains its momentum above Fibonacci's 38.2 percent fan line, can target 4 571 and 4 595 levels. As for the decreases, Fibonacci's 38.2 percent fan line indicating 4 460 below 4 489 can work as a response level.
|Support||4 520||4 489||4 460|
|Resistance||4 571||4 595||4 622|
As a result of the transactions that took place after Bitcoin ETF entered into markets in the US session, the volume of the cryptocurrency market exceeded 2.7 trillion and we saw Bitcoin start to test its all-time peak levels. Although we observed a moderate decrease after these peaks, we will follow 64 100 and 65 370 resistances above 60 460 level. On the other side, 59 120 level will be our significant support below 60 460.
|Support||61 750||60 460||59 120|
|Resistance||64 100||65 370||66 830|