Daily Analysis 10.02.2023.

In Germany, Europe's largest economy, the consumer price index increased by 1% monthly and 8.7% annually in January. Richmond Fed President Thomas Barkin emphasized the importance of the effects of the Fed's tightening policy, and stated that the main question for this year is whether the softening in inflation will continue. The number of first-time applications for unemployment benefits in the US rose to 196 thousand in the week ending February 4, increasing more than expected. While the dollar index is priced above the 103.0 level, the parity continues to move between the 1.07 – 1.08 band.

On the European side, the statements of the central bank officials supported the stock markets yesterday, while the Bank of England (BoE) Governor Andrew Bailey said that the fall in inflation in the UK will accelerate. Noting that the labor market is showing signs of weakening, Bailey stated that this situation will ease his hands in the field of policy area in the future. Joachim Nagel, a member of the European Central Bank (ECB), noted that the bank must continue its hawkish policies with determination until it reaches its 2 percent target. With Bailey's statements, the FTSE 100 index in the UK saw its historical peak with 7,949 points during the day, and brought the closing record to 7,911 points.

There was no significant data flow announced in global markets this week. It was observed that the secondary level data disclosed did not cause volatility. During the week, the speeches of Fed Chairman Powell and Fed officials were followed. While there are no surprise statements, it is stated that interest rate increases will continue for a while. Risk appetite is not very strong. There were selling movements in the US stock markets yesterday and a similar trend continues in the US futures this morning. The dollar index is trading between 103.21-103.39 this morning. Ounce gold has managed to hold above the $1860 level since the beginning of the week, but there is a limited decline below this level this morning. Still, he appears to be cautious.

While the 25 basis point rate hikes in money markets were considered certain in March, it rose to 71 percent in May. On the other hand, the increase in the probability of a 25 basis point interest rate hike to 35 percent in June further strengthened the risk perception in the markets. Noting that uncertainties about where the Fed will set the final interest rate make it difficult for relatively risky assets to navigate, analysts said that the verbal guidance of Fed officials and signals from the data are followed closely by investors. The S&P 500 closed the session down 0.88% at 4.081. As of this morning, the outlook for the S&P 500 futures contract is at 4,077.