Daily Analysis 04/01/2023

In Germany, Europe's largest economy, inflation fell by 0.8% on a monthly basis in December, while annual inflation was announced at 8.6%. The unemployment rate in the country fell surprisingly to 5.5% in December. The fall in inflation in Germany was effective in strengthening the expectations that the European Central Bank might abandon its tightening policy sooner than expected. In the US, the manufacturing sector PMI index hit its lowest level since May 2020 with 46.2 in December. The sector performed poorly while closing 2022 due to the sharp contraction in production and new orders.

The UK Department for Work and Pensions has announced that millions of low-income households will receive up to £900 in cost-of-living support from the government during the financial year. Manufacturing PMI in the country recorded an increase of 45.3 in December, slightly above the expectations, and remained below the 50 threshold. On the US side, manufacturing PMI was announced at 46.2 in December, the lowest level since May 2020. Construction expenditures in the USA increased by 0.20% in November, exceeding expectations. While there is no significant data flow in the UK today, the ISM manufacturing PMI and FOMC meeting minutes will be monitored in the USA.

In the first week of the new year, concerns about a recession continue to put pressure on prices. Risk appetite is not very strong. Today, this issue may have an impact on the course of the market. Today, the minutes of the December meeting of the ISM manufacturing PMI and the Fed will be released in the USA. FOMC minutes are not fresh data. However, it will be important to see between the lines of the two-day meeting. Before the US non-farm payroll data, which is expected to be released on Friday, today's data can be expected to cause limited volatility in the markets. This morning, the Dollar index is trading between 104.40-104.59.

S&P 500 index closed yesterday at 3,824 with a loss of 0.38%. US stock markets started the first trading day of the new year weakly. As the effect of the sale on technology stocks spread to the general public, the closings were realized with a decrease. The International Monetary Fund (IMF) recently announced that the recession forecast for this year is strong. While this is making the markets nervous, he expects that the Fed is focused on reducing inflation this year and therefore will continue to increase interest rates more calmly. This uncertainty suppresses risk appetite. The minutes of the Fed meeting held in December can be viewed today. In the US, ISM manufacturing PMI data will also be released. There are 3.820 - 3.791 - 3.759 support points for the contract, while 3.880 - 3.912 - 3.941 resistance points can be followed above.