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Fundamentals

02.08.2021

Europe

Statements from members of the European Central Bank (ECB) were followed by markets. ECB Vice-President Luis de Guindos, who made the comments on the last trading day of the week, said that while concerns about a Coronavirus outbreak had eased slightly within the Board, medical data would be carefully monitored. These statements by Guindos, as well as statements by ECB member Gabriel Makhlouf regarding the digital euro, were significant. Makhlouf said the ECB had not yet indicated its decision on the digital currency and he was optimistic about the digital euro. On the other hand, in Germany, the locomotive economy of the Eurozone, 1,806 thousand cases were announced as of July 31, while the German government imposed a test requirement for people coming back from a vacation.

Beyond this, Pfizer/BioNTech and Moderna agreed to increase prices in their negotiations with the European Union (EU). On the other hand, macroeconomic data, which has an impact on the euro, was also on our radar. In Germany, GDP grew by 1.5 percent year-over-year, compared with the previous quarter in a preliminary second-quarter data of 9.6 percent. Eurozone grew 2 percent quarter-over-quarter and 13.7 percent year-over-year, beating market expectations. Eurozone's leading consumer price index (CPI) was down by 0.1 percent on a monthly basis, compared to July, it was also down by 2.2 percent on annual basis. Finally, unemployment rates were slightly subdued in June, stayed below the expectations and registered as 7.7 percent.

US

Statements from Fed members, which direct asset pricing in global markets, were significant. The infrastructure and investment package dispute between Democratic and Republican members in the Senate closely followed. St. Louis Fed President James Bullard expressed satisfaction with the growth data released on the last trading day of the week, while reiterating that he expected strong growth in the second quarter of the year. Bullard, who expects a growth of 7 percent at the end of the year, said rising inflation rates could be subdued at the first months of 2022. Fed member Lael Brainard also said that they could intervene if recently increased inflation rates persistently exceed the average inflation of 2 percent. On the other side, White House official Cecilia Rouse said inflation could be subdued by showing President Joe Biden's economic plan for rising inflation.

Along with statements from Fed members and White House officials, negotiations on the infrastructure and investment package started in the Senate. In the Senat talks, which began last week and failed to reach a compromise, it was decided to start negotiations on the infrastructure package by a yes vote of 66 against 22 at the weekend. In addition to these developments, the macroeconomic data announced recently were important. Core personal consumption spending rose 0.4 percent month-over-month to 3.5 percent year-over-year, falling short of market expectations. Chicago Purchasing Managers' Index was at 73.4 in July, while Michigan consumer sentiment was at 81.2, beating market expectations.

Britain

Free Trade Agreement signed between Britain and New Zealand was prominent in the British session. Trade Minister Liz Truss made a great progress in July 19-July 30 - 6th round of talks. Beyond the Free Trade Agreement, the number of double-dose vaccinations in the UK, which has recently been on the agenda for the Coronavirus outbreak, rose above 84 million people, while 24,470 new cases were announced last day, and 65 people died due to the outbreak. On the other hand, Finance Minister Rishi Sunak criticised the travel restrictions imposed by the UK in an attempt to prevent the outbreak. Sunak called for some easing of measures to help the tourism sector recover. The measures imposed on France will be eased on Thursday, The Times reported.

Asia

In the Asian session, the expansion of restrictions on growing cases of coronavirus in Japan was effective in yen. As the 2020 Olympics continue in Japan, which has long been battling the pandemic, daily coronavirus cases are on the rise. In order to prevent cases, the Japanese government expanded the existing measures in terms of provinces. In addition, Japanese Prime Minister Yoshihide Suga announced that the restrictions, based on the state of emergency law (SOE), will also be imposed in Osaka, Kanagawa, Saltama and Chiba in addition to Tokyo. Looking at the macroeconomic calendar, the manufacturing Purchasing Managers' Index (PMI) in Japan rose to 53 in July. Statements made by the Politburo of the Communist Party of China were significant for China. In its decision, Politburo said that they will adhere to the stability of macro policies, economic activity will be kept in a reasonable range, commodity prices and production will be stabilized, while liquidity will be kept at a sufficient rate. Finance Minister Liu Kun added that there would be no sudden change in fiscal policy. In addition, the People's Bank of China (PBOC) said they will continue to put pressure on the crypto market.

Manufacturing Purchasing Managers' Index (PMI), announced at the weekend, was at 50.4 in July, below market expectations. In Turkey, unprecedented disasters are on the agenda recently. The fire, which started in Antalya Manavgat after flooding in Artvin and Rize last week, was the focus of attention. Turkish President Erdogan declared the areas of fire as disaster zones while inspecting the areas. Again, Erdogan announced the postponement of taxes, SGK premiums, payments on artisan loans, agricultural loans and agricultural debts, while providing a grant of 50 million TRY to those affected by the disaster to address urgent needs. In addition, the Foreign Trade Balance announced on the last trading day of last week was minus 2.85 billion USD in June, while tourism revenue was 3 billion USD in the second quarter of the year. Finally, the gross foreign exchange reserves of the Central Bank of the Republic of Turkey (CBRT) increased by $ 297 million in the week ending July 19 to $ 62,880 million.


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

Dollar had suffered strong depreciation following the July meeting of the Federal Open Market Committee. But the strongest 30-year increase in the core personal consumption expenses price index, a high-frequency data on the inflation outlook, caused panic buying in the dollar, the international reserve currency, which led to the recovery of the index. Technically, Fibonacci 61.8 percent of the fan line despite the loss of momentum and the message that the bullish potential is maintained in the price outlook, we will follow 92.35, 92.70 and 93.00 resistance levels. On the other hand, we will not expect a negative outlook unless the fan line in question in the index breaks with permanence. However, 91.65 and 91.30 supports can be followed in this possible sales scenario.

Support91.6591.3091.00
Resistance92.3592.7093.00

Parities

EURUSD

Although inflation figures, which reached a 13-year peak in Eurozone, slightly depreciated the euro, bullish moves are outweighed thanks to strong growth figures. If the pair, which maintains its position above the descending trend, may overcome the psychological resistance of 1.1900 in its upward attempts, it can end the minor channel and continue its gains in favor of the euro to 1.1935 and 1.1970 resistance. In the current outlook, the pair's easing seems likely to gather strength from the 1.1840 level.

Support1.18401.18101.1780
Resistance1.19001.19351.1970

GBPUSD

The pair, which gained close to 3 percent in trading in favor of sterling and tested its highest in more than 1 month, failed to exceed 1.3980. After that, the pair declined below the minor ascending trend with the profit realizations it faced here. It may pull back to 1.3780 after 1.3820, in case, it can break the 1.3860 support. In possible recovery movement of the pair, the 1.3940 – 1.3980 resistance zone will remain important.

Support1.38601.38201.3780
Resistance1.39401.39801.4020

USDJPY

In Japan, the recovery in yen assets was limited after a state of emergency was extended in the fight against the coronavirus. If the price view, which also receives strong support from the major trend in the technical chart, ends its minor retracement trend by exceeding 110.25 resistance above 109.95 within the scope of bullish potential it retains, it will possibly climb to 110.60 resistance. On the other hand, the decline of the pair is unlikely to become apparent unless it breaks the major trend in question. But in this scenario, 109.35 and 109.00 can also be followed as critical support zones.

Support109.35109.00108.70
Resistance109.95110.25110.60

Commodities

XAUUSD

Gold price eased downwards due to some recovery in the dollar in global markets, the contribution of demand, fueled by a weak course of long-term US bond interest rates, continues. In this sense, the permanence of the yellow metal above 1800, which can be considered as a movement to recover retreats, may target 1821 and 1833 resistance levels.

Support180017881775
Resistance182118331847

USOIL

Strong growth figures recorded decisively from developed countries in the markets' macroeconomic calendar keep energy demand expectations stable. If crude oil, which broke the intermediate trend line with purchases that came as a result of this, can maintain its gains above 71.75 in the critical support position, it can focus on 73.70 and 74.50 resistance levels. In other words, the lower boundary line of the minor channel, which cuts 71.75, can play a role as a strong barrier in commodity easing.

Support71.7570.8570.00
Resistance73.7074.5075.45

XAGUSD

In the face of investor risk appetite, which has shown a mixed outlook in the markets, silver, a key member of the precious metals group, is having trouble finding direction. But as long as it is permanent above the 50-period simple moving average, a short-term balance within 25.25 - 25.85 range can trigger a move above 25.85, in this case 26.10 and 26.35 will be on our radar.

Support25.2525.0024.70
Resistance25.8526.1026.35

Indices

DAX40

Following the gross domestic product data for Germany, Eurozone's locomotive economy, DAX30 index appears to have taken control of its losses at the 50-period exponential moving average. If the index, which opened the new week positive by holding on here, may trade above 15 730, and we will also follow 15 815. On the other hand, it is unlikely that the index will start a retracement movement unless it breaks the moving average in question, which has a value of 15 495.

Support15 56015 49515 400
Resistance15 73015 81515 880

S&P500

Investor stress after FOMC in the US markets and corporate profits, which came high during the balance sheet season, are keeping the SP500 index close to a record high. Technically, the bullish momentum will continue in the index as long as it stays above Fibonacci 38.2 percent fan line. If 4 432 resistance is exceeded strongly, 4 445 and 4 458 levels will be on our radar. In case of a decline below 38.2 fan line, 4 396 and 4 381 supports will be significant.

Support4 4084 3964 381
Resistance4 4324 4454 458

Cryptos

BTCUSD

Bitcoin, the leading cryptocurrency, continues its recovery from 1-month low. Tendency to recover losses will be maintained as long as pressure is established on 38 250. And 41 200, 42 600 and 44 300 can be followed in upward transactions. On the other side, in possible decreases below 38 250 level, 36 700 and 35 000 levels will be on our radar..

Support38 25036 70035 000
Resistance41 20042 60044 300

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