Daily Analyses

07.04.2020

Fundamentals

Europe

The trading day we left behind in the eurozone was at the forefront of news flow compared to the macroeconomic calendar. German Finance Minister Olaf Scholz and Economy Minister Peter Altmaier announced a new aid program for small and medium-sized businesses in their joint press conference, as part of their efforts to support Europe's largest economy, which is shaken by coronavirus pandemic. It was also reported at the meeting that the government would provide a loan guarantee of up to 100 percent. European Central Bank (ECB) Governing Council member Isabel Schnabel argued that aid should come at a European level to Eurozone members who are struggling to cope with the pressure the coronavirus crisis put on the economy.’ This is not just a matter of European solidarity," Schnabel stressed, adding that the corona bond is a possibility, yet that other instruments, including the EU rescue fund (ESM) or the European Investment Bank, could be alternatives. In the statement made by the European Union, it was announced that a decision was made to apply tariffs on glass, fiber and fabric products. The tariffs will be applied by 20 percent for imports from Egypt and 99.7 percent for imports from China for 5 years. ‘To help the recovery, we expect the removal of unfair taxes, including steel and aluminum, from our partners,’ an EU spokesman said in a statement. ‘If the Coronavirus outbreak increases distinctions among eurozone economies, it would be very dangerous,’ warned Gentiloni, the Commissioner for Economic Affairs. On the macroeconomic calendar, the euro zone's index of investor confidence in March stood at minus 42.9 points, below market expectations of minus 30.3 points, according to Sentix, a Frankfurt-based Market Research Institute. The Eurozone construction Purchasing Managers' Index (PMI) fell to 33.5 points in March, down from the threshold level of 50 points, according to data from IHS Markit, a London-based global information provider, pointing to contraction in the construction sector. Factory orders in Germany fell 1.4 percent in February, above expectations of minus 2.4 percent compared with the previous month, according to data from the Destatis.

US

While there was no macroeconomic data recorded in the US wing that could enter the markets' agenda, news flows were also fairly limited. First, US President Donald Trump stressed that he would impose very serious tariffs if oil prices continued to remain at current levels, but he did not think that would be needed because Russia and Saudi Arabia would eventually agree. On the other side, St. St. Louis Fed President James Bullard said the $ 2.2 trillion economic relief law approved by Congress the previous week was of the appropriate size and more economic relief might not be needed if support efforts were to be implemented well. ‘What is important now is to pass these resources on to the right people who have been damaged by the Coronavirus outbreak,’ Bullard said. White House economic adviser Larry Kudlow said he did not think the Federal Reserve (Fed) was ending its efforts to combat coronavirus, saying: ‘Coronavirus-linked US Treasury bonds are a big idea. It's time for a bond sale that will raise liquidity for coronavirus relief efforts,’ the statement said.

Britain

In Great Britain, Queen Elizabeth II's speech to the nation came to prominence. Noting that coronavirus brings financial difficulties, bereavement and major problems to be overcome, Queen Elizabeth said: ‘We are all fighting this disease together. If we are determined and together, we will come through this disease." The reason why the fight against coronavirus is different from other challenges faced before is a joint effort, Queen Elizabeth stressed, ‘we will succeed.’ On the other side, a spokesman for British Prime Minister Boris Johnson announced that the prime minister had spent a night in hospital and was continuing his work as leader of the government, while remaining in hospital for observation. In addition, the spokesman reiterated their commitment to keep Brexit negotiations going, saying: ‘the EU and Britain continue to analyze the legal texts, the talks are ongoing. We will not extend the Brexit transition period."  On the macroeconomic calendar in the UK, the Construction Purchasing Managers' Index (PMI) in the UK was 39.3 points, slightly below expectations of 44.0 points in March, according to data published by the Chartered Institute of Procurement & Supply (CIPS).

Asia & Turkey

The stimulus package announced in Japan on the trading day, which we left behind in Asian markets, was followed by the markets. Japanese Prime Minister Shinzo Abe has announced the approval of the country's $ 60 trillion stimulus package. Abe noted that the package, which includes the largest incentive in Japan's history, includes the distribution of 6 trillion yen in cash to coronavirus-affected consumers and small businesses, plus a 26 trillion-yen tax and social service cost reduction for businesses. In addition, Abe reported plans to declare a state of emergency for one month in seven cities, including Tokyo and Osaka, as coronavirus cases again escalated in some of the country's largest metropolises. On the other hand, household confidence in Japan was recorded at 30.9 points, below market expectations of 35.0 points in March, according to consumer survey results released by the Cabinet of Japan. In the Chinese wing, however, news flow was limited due to the fact that it was a public holiday. China's Ministry of Commerce was quoted as saying the market was prominent. Jiang Fan, an official at the ministry's Foreign Trade Department, said China would not restrict exports of medical supplies to other countries, but would continue to contribute to the global fight against coronavirus. According to the monthly price developments report published by the Central Bank of the Republic of Turkey (CBRT), the consumer inflation decreased by 0.51 percentage points in March to 11.86 percent. Energy and food prices were determining factor in this decline. The monthly price developments report stated that energy prices, despite the depreciation of the Turkish lira, decreased significantly due to the severe fall in international oil prices due to the outbreak, while fruit and vegetable prices were also effective in slowing annual inflation, but other food items supported inflation upward, and service inflation declined at a limited rate during this period. Meanwhile, Winslow, director of international credit rating agency Fitch Ratings, said they expect a sharp contraction in Turkey in the second quarter of this year, but predicted a recovery in the fourth quarter, following more horizontal growth in the third quarter of the year.


Indicators

MSCI iShared ETF’s

Msciisharedetfs
MSCI iShared ETF’sDownload Image

MSCI ETF indices are used for measuring the performance of a stock market located within a certain region. Prior to take any actions regarding the relevant region, stock market investment funds follow up the ETF yields and risk measurement.

10Y Bond Yields

10Ybondyields
10Y Bond YieldsDownload Image

Yields of the government bonds are determined by trading in a second market. High yields mean that the government will pay off high interest rates. On the other hand, low yields mean that the government will pay off lower interest rates.


US Index

USIndex

Technically, the dollar index appears to be preparing for an ascending wedge pattern with limited price steps. If the index decreases below the lower barrier of the wedge on the new trading day, it can test the ascending trend, following 100.20, 99.90 and 99.50 supports, and end the wedge pattern. Possible rises of the index can be followed by resistance of 101.00 and 101.40 above 100.70.  

Support100.2099.9099.50
Resistance100.70101.00101.40

Parities

EURUSD

The desire to withdraw from the upper barrier of the descending channel, appears to be continuing in the minor price channel. If the pair can break the support of 1.0790 below by continuing negative pricing on the new trading day, it will also test 1.0760 and 1.0720. In the possible recovery movement, 1.0860 and 1.0900 resistances can be monitored in transactions in favor of the euro.  

Support1.07901.07601.0720
Resistance1.08601.0901.0930

USDTRY

The dollar/TL exchange rate, which has been testing its nearly 20-month peak level in the minor price channel, appears to be trying to maintain gains in this region. If the exchange rate can exceed 6.8000 resistance above by maintaining the desire to rise in the minor price channel, it can target 6.8300 and 6.8700 resistances. 6.7300 and 6.7000 supports can be monitored if it retreats with take profit sales it may face in the region.  

Support6.73006.70006.6600
Resistance6.80006.83006.8700

GBPUSD

Cable ended the retracement movement due to the reaction it received from the ascending trend, and encountered resistance at 1.2330, the 50-period weighted moving average. If it exceeds 1.2330 with these reactions on the new trading day, then their rise may bring up 1.2370 and 1.2420 resistances. If the pair does not exceed this level, the withdrawal may be limited in the retracement channel.  

Support1.22301.21901.2140
Resistance1.23301.23701.2420

USDJPY

The dollar/yen parity, which has been trying to recover its losses with the reactions it received from the ascending trend, has not been able to overcome the upper barrier of the descending channel. 108.40, 108.00 and 107.60 supports can be monitored for downward movements. 109.20 and 109.60 resistances can be followed if the pair is intended to break the upper barrier of the descending channel.  

Support108.40108.00107.60
Resistance109.20109.60110.00

Commodities

XAUUSD

Technically, it appears that the yellow metal ended its rectangular pattern by turning towards value gains in the ascending price channel. If the commodity exceeds 1674 resistance above by holding on the upper barrier of the rectangular pattern, it can also target the 1689 and 1704 resistances. 1642 and 1627 supports can be monitored for possible downward loosening in commodities.  

Support164216271611
Resistance167416891704

USOIL

Crude oil, which is heading to recover its losses by ending the downward trend, has not been able to overcome the upper barrier of its rectangular pattern. In this region, crude oil is settled above the 200-period weighted moving average of 29.05. In its tests for higher levels, 30.65, 31.50 and 32.40 resistances could be tested. In a decline below the 200-period weighted moving average, 28.10 and 27.20 could be followed.  

Support29.0528.1027.20
Resistance30.6531.5032.40

XAGUSD

It appears that the precious metal has ended the trend movement, which has been rising and falling through the retracement channel. Positive pricing may also bring 15.38, 15.60 and 15.81 resistances into the agenda if the trend can be maintained in the continuation of this movement, which is decisive in terms of the new direction of the commodity. 14.96 and 14.74 supports can be monitored for retreats in case the commodity fails to hold in this region.  

Support14.9614.7414.52
Resistance15.3815.6015.81

Indices

DAX30

The DAX Index appears to have ended its negative directional trend by gaining value through stable purchases. With this move, which may be a reference to a new trend, the index can target 10 420 and 10 550 resistances if it exceeds 10 300 resistance above by continuing its movement in a minor rising trend. 10 060 and 9 940 can be monitored in possible retreats in the index.  

Support1006099409810
Resistance103001042010550

SP500

The SP500 index, which tends to recover with volatile operations in the ascending channel pattern, is seen to have moved above the 200-period weighted moving average of 2 593. As long as it becomes permanent above the 200-period weighted moving average, which we follow in terms of maintaining the index's desire to recover, rises can also reach 2 704 and 2 756 resistances. 2 541 and 2 589 supports can be tested in the loosening of the index that can be experienced below the moving average in case of weakening in the recovery demand.  

Support259325412489
Resistance270427562810

Cryptos

BTCUSD

The cryptocurrency, which is turning towards value gains in ascending trend pricing, is seen to face resistance at the level of 7400, the 200-period simple moving average. If the cryptocurrency can break that level by continuing positive pricing behavior on the new trading day, it can also follow 7 600 and 7 800 resistances. In case this level cannot be exceeded, the retreats may follow 6 800 and 6 600 supports below 7 000.  

Support700068006600
Resistance740076007800

Economic Calendar

CountryTime (GMT)Action
Germany 06:00 German Industrial Production
uk 07:30 Halifax House Price Index
uk 08:30 Labour Productivity (Q4)
eu 10:00 Eurogroup Meetings
usa 14:00 JOLTs Job Openings (Feb)
usa 20:30 API Weekly Crude Oil Stock

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