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Fundamentals

17.01.2022

Europe

During the European session, news from Germany, which is the locomotive economy of the region, was at the forefront. As coronavirus cases continue to remain high in the country, Health Minister Karl Lauterbach said that if the case numbers increased dramatically, they could take more stringent measures. On the other hand, the German Economy Ministry said that gross domestic product (GDP), which grew by 2.1 percent in 2021, will be suppressed due to difficulties in production and supply constraints in the first quarter, and it is likely that the supply shortage in some important products will continue for some time. Meanwhile, it was reported that Finance Minister Christian Lindner wants to implement the global minimum corporate tax of 15 percent for multinational corporations in January 2023. Finally, the German government announced that Foreign Minister Annalena Baerbock will visit Ukraine and Russia and hold talks on bilateral country relations. On the other hand, the statements of policymakers in the face of inflationary pressures continue to be closely followed. European Central Bank (ECB) President Christina Lagarde reiterated that the bank will take the necessary measures to achieve the 2 percent inflation target in the medium term, and said that she expects Eurozone growth to exceed the pre-pandemic level in the first quarter of this year.

US

In the United States, which is the focus of global markets, the inflation data announced at the peak of 40 years continues to affect dollar assets. New York Fed President John Williams noted that the Fed is close to starting to raise rates, adding that the Omicron variant could slow growth in the country for several months and increase problems in the supply chain. Chicago Fed President Evans stated that the Fed may have to make four rate hikes in 2022 if inflation does not decline quickly enough. Finally, Mary Daly, President of the San Francisco Fed, noted that the Omicron wave will further extend the period during which inflation will remain high. As for foreign policy, the US Senate did not approve the draft law providing for new sanctions on Nord Stream 2. Meanwhile, White House press secretary Jen Psaki reported that the United States is concerned that Russia is preparing to invade Ukraine if its diplomatic initiatives do not achieve their goal. Looking at the macroeconomic calendar, according to Fed data, industrial production grew by 0.1 percent year-over-year, yet shrinking by 3.67 percent in December compared to the previous month. In addition, the capacity utilization rate in this period was 76.5 percent, below market expectations of 77.0 percent. According to preliminary data released by the University of Michigan, consumer sentiment was 68.8 points, below market expectations of 70.0 in January.

Britain

In the UK, high coronavirus case numbers continue due to the Omicron variant. While 80 725 coronavirus cases were announced in the last 24 hours, the 7-day average approached 120 thousand. However, government officials are determined not to take a step towards more stringent measures. It was noteworthy that the British Minister of Health, Sajid Javid, stated that the country is leading the world in learning to live with Covid-19. Meanwhile, calls for the resignation of UK President Boris Johnson from the opposition are growing after footage emerged of him breaching restrictions during the country's shutdown. However, for the time being, Johnson is still silent. Also on foreign policy, the British government announced that it decided to intensify negotiations with the European Union (EU) to resolve the problems caused by the Northern Ireland Protocol. According to the data of the Office for National Statistics (ONS), gross domestic product (GDP) increased by 0.9 percent in November, reaching the levels before the pandemic.

Asia

During the Asian session, it was important that the People's Bank of China (PBoC) reduced the One-Year Medium-Term Lending Facility Rate by 10 basis points for the first time since April 2020 to 2.85 percent. On the other hand, gross domestic product (GDP) grew by 1.6 percent in Q4 compared to the previous quarter, and it also grew by 4.0 percent, above market expectations of 3.6 percent year-over-year, according to the National Bureau of Statistics of China (NBoSC). On the other hand, in Japan, the leading country in the region, the Central Bank's (BoJ) announcement that it had received 70.1 billion yen in exchange-traded funds for the first time since October 1 was critical. In addition, coronavirus cases in the country increased by about 50 times in the last two weeks, and 25 621 cases were reported in the last 24 hours. Regarding the issue, Prime Minister Fumio Kishida stated that stricter measures could be taken and the border measures were extended until the end of February. In Turkey, President Erdogan said that as the fluctuations in the exchange rate begin to calm down, the gains of the Turkish economic model will begin to be seen better, adding that they will continue to protect citizens from inflation. Meanwhile, Treasury and Finance Minister Nebati also drew attention to the fact that inflation will peak in January, but it will reach the single digits in 2023.


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

Federal Reserve is highly likely to make at least 3 rate hikes in 2022. Although this situation somewhat supports the dollar index, the real yield of the dollar among the developed country currencies is declining in the negative zone due to current inflation expectations. As a matter of fact, recovery attempts were limited at the 5-day highs marked by the 30-period exponential moving average in the dollar index, which also maintains its sales potential. In case, 94.80 can be broken, losses may deepen to 94.20 below 94.50. On the other side, if the index exceeds 30 EMA, we will follow a 95.40 resistance level.

Support94.8094.5094.20
Resistance95.4095.7096.00

Parities

EURUSD

The rally in natural gas prices in Europe seems to be over. Despite the fact that inflation pressures also eased somewhat in recent months, European policymakers are cautiously hawkish, keeping the tone of communication in line with the global trend. However, for the first time since May 2019, German bonds are approaching 0 in the debt market and the euro is getting stronger. If the euro, which ended its downward trend against the dollar at the current point, maintains its permanence above 1.1360 in terms of confirming the recovery path, it will test the 1.1540 level above 1.1480. On the other side, 1.1360 and 1.1300 supports can be followed.

Support1.13601.13001.1235
Resistance1.14801.15401.1600

USDTRY

Turkish economic administration continues its heterodox policies, noting that funds continue to be deposited into the Foreign currency-protected TRY deposit account. However, the increase in foreign currency deposits of domestic residents indicates that dollarization has not yet ended. while the monetary authorities of developed and developing countries paved the way for monetary tightening due to global inflation, the loose stance of the Central Bank of the Republic of Turkey (CBRT) may create a wave of accumulated sales in the Lira. Here we follow 14.0000 known as the defense zone of the CBRT. Above 14.0000, the upward movement may gain momentum towards 14.2400. On the other hand, a path in favor of TRY seems unlikely unless there is a strong transition below the channel pattern.

Support13.190013.000012.6800
Resistance13.750014.000014.2400

GBPUSD

While gross domestic product in the UK reached the pre-pandemic period, forecasts that the Bank of England (BoE) will be more comfortable with continuing interest rate hikes are bringing purchases to the pound. Technically, 1.3730, 1.3780, and 1.3840 resistances can be followed at the pair where the upward potential will be maintained as long as it stays above the 50-period exponential moving average. If the intermediate trendline indicated by the 50 EMA is broken, 1.3570 and 1.3515 supports may be followed.

Support1.36251.35701.3515
Resistance1.37301.37801.3840

USDJPY

Rising interest rate expectations and treasuries in international markets started to put pressure on the safe-haven assets again. As a result, the pair, which started to move upwards from the intermediate trendline, can break 115.20 above 114.85 and end the minor wedge pattern, heading for 115.60. In case of possible permanent moves below the trend, 113.55 and 113.20 supports will be on our radar.

Support114.00113.55113.20
Resistance114.85115.20115.60

Commodities

XAUUSD

Surprise contraction of locomotive sectors in the world's largest economy supported Gold price. However, the decline in 10-year Treasury yields in the debt market was not permanent and purchases in Gold also failed to gain volume. If the commodity breaks 1810 downwards, 1800 support will be on our radar. On the other side, 1829 resistance remains decisive.

Support181018001789
Resistance182918401852

USOIL

China's agreement with the United States to release its crude oil reserves did not create a strong sell-off, as it has been known for a long time in the markets. However, the fact that the high levels of global inflation expectations are pushing forward the demand for crude oil outweighs. Crude oil tested the highest level of the last 2.5 months after ending the channel pattern. If it stays above 82.00, we will follow 85.00 resistance closely. On the other side, 80.50 and 78.85 support levels will be on our radar below 82.00.

Support82.0080.5078.85
Resistance85.0086.5588.10

XAGUSD

The high levels of investor risk appetite in global markets are relatively maintained. While the purchase contracts for safe-haven assets cannot gain strength, it seems that silver continues its movements within the descending channel. If the 22.65 support highlighted below is broken in this direction, sales will gain momentum towards 22.30 and 22.00. On the other hand, a recovery path is unlikely unless the upper boundary line of the channel, which cuts 23.40 currently, is exceeded with permanent moves. However, in this possible bullish scenario, 23.70 and 24.00 resistances might be followed.

Support22.6522.3022.00
Resistance23.4023.7024.00

Indices

DAX40

Expectations that a record decline in natural gas prices in Europe will reduce the cost pressure on the balance sheets of German companies cause DAX40 to diverge positively from other stock markets. Despite the volatility in US futures, the index, which halted at the 100-period simple moving average located around 1-week lows, can focus on 16 170, in case, it can confirm the continuation of the trend by breaking 16 030 and minor descending wedge pattern. On the other side, 15 785 – 15 665, Fibonacci retracement zone, will be on our radar.

Support15 78515 66515 530
Resistance16 03016 17016 300

S&P500

The unexpected decline in the US industry due to the Omicron effect is a downward factor in the rise of the SP500 index. However, purchases of SP500 contracts are keeping the index strong as Fed Chair Jerome Powell eased the expectations for a balance sheet reduction. Technically, the index, which uses Fibonacci 50.0 percent fan line as a response zone and starts upward moves, can head for 4 789 resistance above 4 744, in case, it can break 4 700 level. On the other side, 4 611 support can also be considered as significant support.

Support4 6114 5654 520
Resistance4 7004 7444 789

Cryptos

BTCUSD

Bitcoin, which leads the cryptocurrency market, left the developments in Kazakhstan behind but continues to be under pressure due to the developed countries' interest rate hike signals. Sales potential will be maintained as long as it cannot exceed 45 000 resistance, 40 000, 37 140 and 34 250 supports can be followed. On the other side, 47 850 will be our resistance above 45 000.

Support40 00037 14034 250
Resistance45 00047 85050 790

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