Daily Analyses

25.02.2020

Fundamentals

Europe

In the Eurozone, where macroeconomic data flow is limited, statements from European Union (EU) members were important for markets. The coronavirus (COVID-19) has already spread to 29 countries and killed about 2,600 people, said Janez Lenarcic, a member of the European Commissioner for Crisis Management, adding that the call made to EU countries in recent weeks to increase preparations was well-timed. The EU has agreed to a 230M euro aid package to fight against coronavirus, Lenarcic said. He further added that part of the aid will be transferred to the World Health Organisation (WHO). On the other hand, Kyriakides, a member of the EU Commission for Health and Food Safety, said, "Viruses know no bounds. Our top priority is to protect our citizens." "We must not allow panic and misinformation to prevail," said Kyriakides, noting that EU Commission's readiness to provide any necessary assistance to member states. We need to act in coordination, in unity and in harmony." Meanwhile, French President Emmanuel Macron expressed skepticism about the possibility of the European Union and Britain reaching a post-Brexit trade deal by the end of this year, saying he expects negotiations on fishing to be very hard. On the macroeconomic calendar in the eurozone, the business confidence index in Germany, the Eurozone's largest economy, was 96.1 points, higher than expectation of 95.3 in February, according to data published by the Munich-based ifo Institute. "The German economy looks unaffected by the Coronavirus outbreak," commented Ifo, whose assessment indicated that the morale of German businesses rose in February and that recession fears had eased.

US

President Donald Trump's statements on the US were critical on the last trading day. In remarks before heading to India for an official visit, Trump accused House of Representatives Intelligence Committee Chairman Adam Schiff for trying to harm Vermont Sen. Bernie Sanders, the Democratic Party's presidential nominee, by leaking classified information about Russia's interference in the 2020 election. During his official visit, Trump announced that he would sign an agreement with India based on the sales of military equipment. Trump also noted that the aid would be provided by the federal government if farmers needed additional assistance until trade agreements with China, Mexico, Canada and other countries came into force. On the other side, U.S. Treasury Secretary Steven Mnuchin said central bank members would consider all their options if there was a need to respond to the rapidly spreading coronavirus. "We will have a better idea of the impact of coronavirus on the economy in 3 to 4 weeks," Mnuchin said, noting that it is difficult to make a strong prediction about the economic impact of coronavirus.

Britain

In Britain, where the agenda can be considered calm, statements by Prime Minister Boris Johnson's spokesman were closely followed by the markets. He said Britain would comply with its obligations under Northern Ireland protocol with the European Union, and argued that it did not foresee the introduction of new controls of goods between Britain and Northern Ireland. On the last trading day, it was also reported in the British press that Prime Minister Boris Johnson was allegedly preparing to start trade talks with the US within 2 weeks. The report said the British government's 'red lines' for trade talks would be announced next week, while the US is expected to back down from its demand that pharmaceutical companies gain greater access to the British market.

Asia & Turkey

There were many statements in Asian markets, especially from the China, yesterday. Chen Yulu, Vice President of the People's Bank of China (PBOC), said the effects of the new Coronavirus outbreak on Chinese economy would be for short-term and limited. Chen said that China has plenty of policy tools to manage the economy, so its stable monetary policy will not change, also noting the Bank established a special credit fund amounting 300M yuan to financially support the companies. On the other side, Chinese President Xi Jinping said measures taken to deal with the Coronavirus outbreak were effective, but the fight was still at a critical stage. China will continue its prudent monetary policy and set out new policy steps, Xi said, adding that the government will introduce gradual tax cuts that will work to help small companies overcome challenges. On the other hand, Chinese Deputy Finance Minister Ou Wenhan noted that they had allocated 99.5 billion yuan ($14.16 billion) to be used in trials to prevent the Coronavirus outbreak. In addition, the Chinese Ministry of Commerce said that they have implemented 20 measures in order to return businesses to normal activities and maintain the stability of foreign trade and foreign investment. Finally, a statement from China's National Health Commission said the rapid increase in outbreak cases in Wuhan had halted, but the outbreak had not yet been stopped. Bank of Japan (BoJ) Governor Haruhiko Kuroda said they were carefully examining developments related to the effects of coronavirus and were fully prepared to take the necessary measures. Explaining that the BOJ is ready to unwaveringly loosen monetary policy, Kuroda also stressed that there is no need to consider a specific step at this time. In Turkey, according to the Central Bank of the Republic of Turkey (CBRT) data, in February, the real sector confidence index increased by 2.8 points compared to the previous month and reached 106.9, while the capacity utilization rate across the manufacturing industry increased by 0.5 points compared to the previous month and reached 76 percent. In addition, TurkStat published sectoral confidence indices for February. According to the data, seasonally adjusted service sector confidence index increased by 3.4 percent to 98.5, the retail trade sector confidence index declined by 2 percent and reached 102.9, and the construction confidence index declined by 5.7 percent to 74.5. Treasury and Finance Minister Berat Albayrak gave important news. "We shared our views on the global economy agenda at the G20 Finance Ministers and Central Bank Governors meeting in Riyadh. We held meetings with Nam-Ki Hong, Deputy Prime Minister of South Korea, and U.S. Treasury Secretary Mr. Mnuchin regarding our economic cooperation and regional developments," Albayrak said.


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

The dollar index couldn't exceed the upper barrier of the rising channel and retreated from this area. In case of continued value losses in the index on the new trading day, 99.15 support below the psychological price of 99.00 level can be broken, then 98.85 support may also be on the agenda. If the index wants to recover, 99.50 and 99.35 resistance levels will be on our radar.  

Support99.1599.0098.85
Resistance99.3599.5099.65

Parities

EURUSD

EURUSD broke the minor channel upwards with transactions in favor of euro. If the parity can hold above the upper barrier of the minor channel, we follow in terms of starting the recovery in parity and 1.0880 resistance can be exceeded, the transactions in favor of euro can also reach 1.0900 and then 1.0920 resistance levels. In case, there is no pressure above the channel, we will possibly observe downward movements. In this case, we will follow 1.0840 and 1.0820 support levels.  

Support1.08401.08201.0800
Resistance1.08801.09001.0920

USDTRY

USDTRY tested the channel's upper barrier by maintaining a minor rising trend movement. On the new trading day, if the parity breaks the upper barrier of the channel strongly while maintaining its upward potential, it can raise 6.1400, 6.1600 and 6.1800 resistance levels. 6.1000 and 6.0800 support levels can be monitored for downward loosening, if the parity does not exceed the upper barrier.  

Support6.10006.08006.0500
Resistance6.14006.16006.1800

GBPUSD

Cable appears to be trying to recover with the responses it took at the lower barrier of the descending wedge pattern. If the purchases in response gain volume and lead the movements towards the area above 1.2960 resistance, the recovery desire will possibly test 1.2980 and 1.3000 resistance levels. 1.2910 and 1.2890 support can be followed for downward movements we will observe in case, the responses weaken.  

Support1.29101.28901.2870
Resistance1.29601.29801.3000

USDJPY

Due to the aggressive profit sales in USDJPY, the movements tested the lower barrier of the rising wedge, yet faced with responses in this area. We think the movements will be limited at 111.35 resistance above 111.10 due to the loss of volume in purchases in response. If the retreats continue, 110.50, 110.30, and 110.00 support levels will be on our radar in downward movements below the wedge.  

Support110.50110.30110.00
Resistance111.10111.35111.60

Commodities

XAUUSD

The precious metal, which has been driven towards value gains by aggressive purchases, appears to be loosening downwards due to 'take profit sales' as a result of its contact with the resistance. If 'take profit' sales in commodities increase in volume on the new trading day, 1642 support will be broken. Then, the retreats may also gain momentum towards 1630 and 1618 support levels. 1667, 1680 and 1692 resistance levels can be followed respectively, if the commodity recovers.  

Support164216301618
Resistance166716801692

USOIL

Crude oil, which has been depreciated by strong selling movements, appears to be trying to recover, limiting its losses. 52.55 indicated by the 50-period weighted moving average is a critical position for demand of rising in crude oil, and if it is exceeded in pricing on the new trading day, 53.00 resistance will be our target. As long as the commodity does not exceed this level, retreats may bring 51.00 and 50.60 support levels into the agenda.  

Support51.0050.6050.00
Resistance52.0052.5553.00

XAGUSD

XAGUSD broke the minor rising channel due to the profit realizations faced at the upper barrier of the rectangular pattern. If 18.44 support is broken, 18.30 and 18.16 support levels will be tested in the continuation of this retreat, which can be considered critical to the possibility of the commodity to make a short-term correction. 18.70 and 18.86 resistance levels will be on our radar, in case, the commodity moves towards the upper barrier with the help of the recovery movements.  

Support18.4418.3018.16
Resistance18.7018.8619.00

Indices

DAX30

DAX decreased below the ascending wedge due to strong retreats. We expect it to maintain downward movements due to nature of the pattern. In case, it can break 12 970, which is the 200-period weighted moving average, strongly, the negative pricing behavior will possibly head towards 12 900, 12 820, and 12 750 support levels and end the wedge pattern. 13 030 and 13 100 resistance levels will be tested, if the index meets purchases in response at the 200-period weighted moving average.  

Support129001282012750
Resistance130301310013170

SP500

SP500 is moving down the upward trend with downward transactions and limited its losses in this area at 3 220, which is the 100-period exponential moving average. SP500 took responses at the moving average, and if it exceeds 3 270 resistance above due to the responses, 3 286 and 3 300 resistance levels will be our targets again. In possible retreats, on the other hand, 3 220 level, which is the 100-period exponential moving average located below 3 235 support, can be viewed as critical support.  

Support323532203208
Resistance327032863300

Cryptos

BTCUSD

In downward transactions, the Cryptocurrency faced with support at 9 500, the 50-period weighted moving average. We expect it to take responses at this level. Then, it can exceed 9 800 resistance with these responses, and in this case, 10 000 and 10 300 resistance levels will be on our radar. If the responses are low in volume, the retreats that can be experienced below 9 500 level will probably deepen towards 9 300 and 9 000 support levels.  

Support930090008800
Resistance98001000010300

Economic Calendar

CountryTime (GMT)Action
Germany 07:00 German GDP (Q4)
usa 14:45 FOMC Member Kaplan Speaks
usa 15:00 CB Consumer Confidence (Feb)
usa 20:00 FOMC Member Clarida Speaks
usa 21:30 API Weekly Crude Oil Stock

Central Bank Calendar

RegionMeeting DateActionCurrent Interest Rate
eu 12.03.2020 Deposit Facility Rate (Mar)-0.50%
eu 12.03.2020 ECB Interest Rate Decision (Mar)%0,25

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