With the impact of rising geopolitical risks and the uncertainty of a possible new pandemic, a trend toward risk aversion was observed on a global basis, while the fear index rose
While the outbreak of monkeypox in Africa and the possibility of its global spread added to the selling pressure in global equity markets, excessive talk of World War III added to the pressure. Looking at the important macroeconomic data coming out of the U.S., inflation data came in at 2.9%, below both expectations and previous levels. Nonfarm payrolls were also below expectations at 114K, paving the way for a deepening of prices against the dollar. Unemployment data experienced an inverse correlation with the decline in inflation and recorded a partial increase. The unemployment data was announced at 4.3 percent , which was above both expectations and the previous level. The average hourly earnings data came in at 0.2 percent, below expectations and the previous level. The services PMI data was reflected on the calendar as another important data that failed to meet expectations with 55. The ISM non-manufacturing PMI was announced at 51.4, in line with expectations but above the previous level. Retail Sales data was announced at 1 percent below expectations but above the previous level. The ISM Manufacturing PMI came in at 46.8, below both the prior reading and expectations. The EURO-USD parity, which found support at the key pivot level of 1.0840, attempted to breach the psychological band of 1.10 as the data released from the U.S. led to pricing against the dollar.
While the macroeconomic data flow in Europe was quiet, the Bank of England made no changes to interest rates, holding them steady at 5%. Inflation in the UK remained below expectations at 2.2 percent, but was up from the previous level. In Germany, inflation data was released at 0.3 percent, in line with expectations but above the previous level. Looking at the GBP-USD parity, it maintained its persistence above the 1.27 level, which is very important both technically and psychologically, and followed a positive course throughout the month, extending its buying attacks towards the 1.30 level.
The gold ounce continued to rise amid geopolitical risks
The precious metal, which maintains its upward potential with the support of the technically important level of $2300, tested the psychological level of $2500.
In an environment where there is so much talk of World War III and at the same time confidence in the US economy is declining, it is very likely that the demand for gold ounces will continue to increase. On the silver ounce side, it has been observed that the bullish sentiment has strengthened, which has led to reaction buying from the major support level of $26.60. The critical resistance level of $30 should be carefully watched for the extension of the upward attacks.
The markets experienced sharp price movements with the intervention of the Bank of Japan
The Japanese yen, which has provided carry trade opportunities for years, experienced a sharp appreciation on the yen side as the Bank of Japan moved from negative to positive interest rates. The USD-JPY parity, which had fallen from over 160 to the 140 area, began to seek equilibrium, albeit only partially. The Reserve Bank of Australia made no changes to interest rates, leaving the cash rate unchanged at 4.35percent. The Reserve Bank of New Zealand announced a 25 basis point cut to 5.25 percent. On the Chinese side, the unemployment rate was announced at 5.2 percent, both above expectations and above the previous level.
In the domestic markets, the downward trend in inflation continued
The CPI data was announced at 61.78 percent, below both expectations and the previous level. The retail sales data was reflected in the economic calendar with a value above the previous level of 1.7 percent. A slight increase in the unemployment rate was observed and the data was announced at 9.2 percent. On the Borsa İstanbul side, profit taking was experienced with sellers entering above 11 thousand and the search for balance continued at the critical pivot level of 9700.
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