Daily Analysis 06/01/2023

In the Euro Zone, it decreased by 0.9% monthly in November and reached 27.1% on an annual basis. Thus, producer inflation in the Euro Area continued to decline. Exports in Germany decreased by 0.3% to 135.1 billion euros in November, while imports decreased by 3.3% to 124.4 billion euros. Thus, Germany's foreign trade surplus, adjusted for seasonal and calendar effects, was 10.8 billion euros. US ADP private sector employment increased by 235 thousand in December. While there is a weakening in the risk appetite after the easing warning, which is prominent in the minutes, after the hawkish messages from the Fed officials, high volatility may be recorded on the day when the non-farm employment figures will be announced.

In the UK, the service PMI was announced at 49.9 in December, just below the 50 reference level, which is the threshold value. In the previous period, the service PMI was 50 threshold. On the US side, while ADP private sector employment increased by 235 thousand in December, above the expectations, pointing to a positive course, unemployment benefits were announced at the level of 204 thousand last week, which was below the expectations. Services PMI, on the other hand, was announced as 44.7 in December and continued to decline compared to the previous month. Today, non-farm employment and unemployment rate data will be in the foreground in the USA.

In global markets, the speeches of Fed officials are closely watched. St Louis Fed President Bullard stated that the risk of the US economy entering a recession has decreased in recent weeks and that he believes a decrease in inflation will be achieved in 2023. Kansas City Fed President George added that he raised his interest rate expectation to 5 percent and that interest rates should remain at these levels until we see a steady decline in inflation. For the next process, economic data will be important in order to affect these expectations. Today is nonfarm payroll day in the USA. The data to be announced may cause volatility in the markets.

The S&P 500 index closed yesterday at 3,809 with an increase of 0.04%. For the first week of the year, the risk appetite in the US stock markets was not very strong. Recession concerns and statements from Fed members were decisive in the course of the stock markets. Several Fed members' speeches were followed yesterday. While statements were made that interest rates would rise until inflation declines, it was also mentioned that the possibility of a recession in the US economy began to weaken. The data to be announced in the USA will be decisive for the future. Data on nonfarm payrolls, unemployment rate and average hourly earnings will be released today. Data-based movements can be seen in the market.