Fear of recession grows in global markets


After the US Federal Reserve (Fed) hiked interest rates by 75 basis points for the first time in 28 years on Wednesday and provided verbal guidance on continuing hawkish policies, recessionary prices in the markets are strengthening.


Although the above concerns increase the selling pressure in global equity markets, volatility in bond markets is observed to continue.

While U.S. bond yields, which hit their highest level in recent years during the week, declined, albeit modestly, following the Fed’s decisions, the yield curve of some assets would have reversed, indicating that the the country’s economy could go into recession.

The fact that the average interest rate for a 30-year mortgage (home loan) in the country rose to 5.78%, the highest level since November 2008, and that housing sales fell more than expected at May supports the possibility of a recession.

With these developments, the S&P 500 Index fell 3.25 percent, the Nasdaq Index by 4.08 percent and the Dow Jones Index by 2.42 percent yesterday in the New York stock market. Index futures contracts in the US started the new day with a rise.

In Europe yesterday the Bank of England (BoE) raised the policy rate by 25 basis points to 1.25%, in line with expectations, and signaled that the steps in the coming meetings could be stronger.

On the other hand, European Central Bank (ECB) officials continue to explain the new tool they will use to reduce the vulnerabilities of regional economies.

According to yesterday’s European media news, Christine Lagarde said the new instrument will come into play if the bond rates of debtor countries rise too fast or if the gap between the bond rates of economically weak and strong countries increases rapidly.

With the news flow in question, the euro / dollar parity increased by 1 percent, while the yield on the Italian 10-year bond decreased by about 25 basis points. Due to the fact that Italy is one of the most indebted countries in the region, the increase in bond yields increases the risk premium of the Euro Area.

Along with the above developments, parallel to the growing selling pressure in the New York stock market, the European stock markets also followed a seller’s path, while the DAX 30 index in Germany was 3.31%, the index The FTSE 100 in the UK was 3.14%, and the CAC 40 index in France was 2.39% and in Italy the FTSE MIB 30 index fell 3.32%. Index futures contracts in Europe started the new day with a rise.

In the New York stock market, the S&P 500 Index lost 3.25%, the Nasdaq Index lost 4.08%, and the Dow Jones Index lost 2.42%.
In the New York stock market, the S&P 500 Index lost 3.25%, the Nasdaq Index lost 4.08%, and the Dow Jones Index lost 2.42%.

Although the Bank of Japan (BoJ) has not changed its monetary policy in line with the expectations of the Asian market, a mixed trend is observed in the regional equity markets.

The BOJ’s official rate remained unchanged at minus 0.1%. The BoJ, which passed the resolution by 8 to 1 votes, announced that it will continue to purchase unlimited amounts of government bonds and 12 trillion yen per year of Exchange Traded Fund (ETF) and 180 billion yen per year of real estate investment funds. Japanese (J-REIT).

In the statement released by the bank, it was stated that attention should be paid to developments in financial and foreign exchange markets, and the downside risks of inflation and economic uncertainties were cited as the reason why the BoJ maintained its favorable stance contrary to its even in the recent period in which central banks around the world have implemented aggressively restrictive monetary policies.

After the decision, Japan’s 10-year bond yield fell to 0.22%, while the dollar / yen parity rose by 1.3%.

While the Nikkei 225 Index lost 1.4% in Japan and the Kospi Index in South Korea lost 0.4% towards the close, the Shanghai Composite Index in China gained 0.9. % and Hong Kong’s Hang Seng Index gained 1.4%.

Nationally, the BIST 100 index, which yesterday followed a weighted sales trend in line with global markets, ended the day at 2,485.36 points with a drop of 1.81%.

Dollar / TL, on the other hand, is trading today at 17.3050 at the opening of the interbank market, after closing yesterday at 17.3032 with an increase of 0.4 percent.

Analysts Today, Market Participants Survey of the Central Bank of the Republic of Turkey (CBRT) and Statistics on Short-Term Foreign Debt, Overseas, Fed Chairman Jerome Powell’s Speech, as well as Inflation in the Eurozone and Industrial Production and Usage of implants in the US Stating that the data will be followed, he said that technically, the 2,480 and 2,440 levels of the BIST 100 index are in the support position and 2,520 points are in the resistance position.

The data to follow today on the markets are the following:

10.00 Turkey, April short-term external debt statistics

10.00 Turkey, June Survey on CBRT market participants

12.00 Euro Zone, Consumer Price Index for May

15.45 USA, Speech by Fed President Jerome Powell

16.15 USA, industrial production and plant utilization rate in May


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