Daily Analyses

20.01.2020

Fundamentals

Europe

European markets started the last trading day with the comments of Phil Hogan, the EU Commissioner for Trade. Hogan said he had held talks in Washington with senior U.S. officials and the effort to ease tensions with U.S. off to 'good start'. He further added, "There’ll be no three-way negotiation. That’s a matter for the United Kingdom and the United States." In the Eurozone, the data published by EuroStat was important. According to the data, industrial production in the Eurozone shrank 1.5 percent in December, slightly below market expectations of minus 1.1 percent compared to the same month last year. The industrial production, on monthly basis, was below the expectations of 0.3 and recorded as 0.2 percent on monthly basis. In addition, Eurostat data showed that the Eurozone consumer price index (CPI) rose 0.3 percent (MoM) in December, in line with expectations and met the market expectations of 1.3 percent (YoY). Again, according to Eurostat data, EU current account surplus (seasonally adjusted) was € 36.6 billion in November. In addition, construction production in the Eurozone rose 0.7 percent compared to the previous month and rose 1.4 percent compared to the same month last year.

US

We followed some significant news on the US President Trump's impeachment. The articles of impeachment of the US President Trump have been formally submitted to the Senate by members of the House of Representatives. On the other hand, Donald Trump said, "The so-called “Supreme Leader” of Iran, who has not been so Supreme lately, had some nasty things to say about the United States and Europe. Their economy is crashing, and their people are suffering. He should be very careful with his words!" "Day after day, really good news on the economy. By the way, this didn’t just happen by accident, it’s the result of a lot of the policies that Donald Trump has put into place. Obviously, the Tax Cut, and now we have these two BIG trade deals," he further added. On Federal Reserve side, board member Michelle Bowman said low unemployment and rising wages meant consumer spending in the US would continue to be strong.     Consumer confidence continued to be strong, Bowman said, adding that the household sector was resilient despite uncertainty over trade and other policies last year, and that the manufacturing sector appeared to be stabilizing and she expected inflation to rise to the 2 percent target over the next 2 years. Looking at the macroeconomic calendar, according to Fed data, industrial production in the US fell 0.3 percent in December, below expectations of minus 0.2 percent compared to the previous month. It also failed to meet market expectations of minus 0.68 percent compared to the same month last year and shrank 1.01 percent. Also, the Capacity Utilization in the United States (MoM) stood at 77 percent in December, while manufacturing production rose 0.2 percent against the expectations of minus 0.2 percent.

Britain

British Prime Minister Johnson's spokesperson said Britain and the EU had signed the final date for trade talks to be completed by the end of this year in a political declaration, stressing that the final date for a trade deal between Britain and the EU would not be extended. Looking at macroeconomic data flow in Great Britain, UK Office for National Statistics (ONS) data showed UK retail sales fell 0.6 percent in December, compared with expectations of a 0.5 percent rise at the previous month, and it fell 0.9 percent, below the market expectations of 2.6 percent (YoY). In this period, core retail sales declined 0.8 percent, below expectations of 0.7 percent (MoM), and it declined 0.7 percent (YoY) below expectations of a 2.9 percent increase.

Asia & Turkey

The data published by China's National Statistics Office was at the forefront in Asian markets. China's economy grew 6 percent in the fourth quarter of 2019, in line with market expectations, compared with the fourth quarter of 2018, according to data released by NBS. In addition, industrial production in China in December was up 6.9 percent, above market expectations of 5.9 percent. The retail sales also increased 8 percent, slightly above market expectations of 7.8 percent. The director of the National Bureau of Statistics of China Ning Jizhe said China would continue its proactive fiscal policy and cautious monetary policy in 2020 and they would offer more support measures as the economy faces downward pressures. They will ensure that economic growth is within a reasonable range in 2020, Ning said, stressing that China is not pursuing a high economic growth and that the fluctuations in GDP growth rate is normal. Ning also said that the U.S. – China trade deal would be beneficial for the Chinese economy and market prospects for the global economy. On the other hand, Chinese Spokesperson and Chief Economist Wang Chunying said that China's current account is expected to be slightly positive in 2020 as a result of the narrowing of the deficit in trade deals and services trade with the United States. Wang also stated that the trade deal signed with the United States is a positive signal for China's foreign exchange market, pointing out that yuan is already gaining value and that China's growth in overseas tourism and education is expected to slow down after a couple of years. On the other side, Chinese Premier Li Keqiang said that China has the confidence and ability to deal with the risks and challenges facing the economy to keep growth within a reasonable range. He further added that they will go for a large-scale reduction in taxes in 2020 and that they will continue to liberalize technology and other sectors. Chinese Vice Premier Liu He suggested that both China and the United States are aware that trade and economic relations between the two countries need to be restored as soon as possible. In Turkey, remuneration applied to required reserves by the Central Bank of the Republic of Turkey was significant. On a Press Release on Reserve Requirements, the CBRT said, "By decreasing the upper limit of the facility of holding standard gold from 30% to 20% of Turkish lira reserve requirements, USD 1.7 billion equivalent of liquidity in terms of gold will be provided to the market, whereas TRY 4.5 billion liquidity will be withdrawn from the market. By increasing the upper limit of the facility of holding standard gold converted from wrought or scrap gold collected from residents from 10% to 15% of Turkish lira reserve requirements, USD 0.3 billion equivalent of liquidity in terms of gold will be withdrawn from the market, whereas TRY 2.0 billion liquidity will be provided to the market." On the other hand, President Recep Tayyip Erdogan said at a press conference ahead of the Libya summit in Berlin that "For Libya to have peace and tranquility, the acceptance of a ceasefire and a return to the political process must be ensured at the Berlin Summit." After the conference, the leaders called for an end to the conflict in Libya, while the declaration called for a ceasefire, as well as for the parties and their supporters to end their military activities and abide by the Arms Embargo of the United Nations (UN).


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, which broke the 50-period exponential moving average, continued its pricing movements and tested the area above the channel. On the new trading day, if the dollar index can break the channel strongly by maintaining stability above the 97.45 level indicated by the 50-period exponential moving average, the upward movement desire will possibly follow 97.80 and 98.00 resistance levels. The 50-period exponential moving average of 97.45 can be followed in the request for a retreat at the upper barrier of the channel.  

Support97.4597.3097.15
Resistance97.8098.0098.15

Parities

EURUSD

Testing the lower barrier of the triangle by aggressive sales, the parity limited at 1.1090, the 50-period simple moving average. If this level is broken in the pricing movements on the first trading day of the week, 1.1080 and 1.1060 support levels will also come up and complete the descending triangle pattern. 1.1100 and 1.1120 resistance levels will be on our radar, if parity wishes to recover.  

Support1.10801.10601.1040
Resistance1.11001.11201.1140

USDTRY

USDTRY, which decreased below the ascending wedge, met support at 5.8500, the 50-period simple moving average. If 5.8500, which we refer to in terms of completion of the parity, is broken on the new trading day, transactions in favor of TRY can complete the ascending wedge pattern by following 5.8200 support. 5.9200 and 5.9400 resistance levels can be monitored in case the responses taken from this level increase in volume.  

Support5.87005.85005.8200
Resistance5.92005.94005.9600

GBPUSD

Faced with 'take profit' sales at the upper barrier of the ascending triangle, the parity decisively retreated. If retreats continue, 1.2980 support will be tested. In this case, 1.2960 and 1.2930 support levels will be on our radar. In case, the currency wants to recover, the movements in favor of Sterling may move towards 1.3030 and 1.3050 resistance levels.  

Support1.29801.29601.2930
Resistance1.30301.30501.3080

USDJPY

The parity headed for the upper barrier of the ascending channel and tried to preserve its earnings within this area. On the new trading day, when the parity becomes permanent above 109.70, which is the intermediate support level, and break 110.30 resistance. The potential for rising can target the resistance levels of 110.50 and 110.80. In the downward deceleration, 109.70 support, which is intermediate support below 110.00, can be followed.  

Support110.00109.70109.50
Resistance110.30110.50110.80

Commodities

XAUUSD

The precious metal, which continues its pricing from the ascending channel pattern, appears to be trying to recover with the responses it took from the minor ascending trend. The responses the commodities took from this area can test 1565 resistance by gaining volume on the new trading day, and in this case, the recovery may also bring up 1570 and 1576 resistance levels. In case the purchases in response are lack of volume, the downward easing may follow 1555 and 1550 support levels.  

Support155515501544
Resistance156515701576

USOIL

Crude oil started the day with a price gap and jumped above the descending wedge pattern. In this area, the commodity was subdued at the 50-period simple moving average indicating 59.20 for a short period of time. If it exceeds this pressure and break 59.70 resistance, it will possibly break 60.30 and 61.00 resistance levels and complete the descending wedge pattern. 58.80 and 58.20 support levels will be on our radar in downward movements.  

Support58.8058.2057.60
Resistance59.7060.3061.00

XAGUSD

The precious metal, which is advancing in ascending trend pricing, was stabilized at 18.02, the 50-period exponential moving average. On the new trading day, if the precious metal can overcome the resistance of 18.12 above by putting pressure on this level, positive pricing behavior can also follow the resistance levels of 18.24 and 18.35. In decreases below this level, silver may face with purchases in response at the ascending trend.  

Support17.9217.8017.68
Resistance18.1218.2418.35

Indices

DAX30

DAX headed towards the upper barrier of the channel, which is rising with the responses it takes from the 50-period weighted moving average. As long as the closing above 13 420, which is indicated by the 50-period weighted moving average and has a characteristic of an intermediate support, becomes permanent, the movements will probably move towards 13 560, 13 600 and 13 650 resistance levels, respectively. In possible downward movements in the index, 13 420, which is the 50-period weighted moving average, will be on our radar below 13 470 support.  

Support134701342013360
Resistance135601360013650

SP500

SP500 maintains rising trend pricing and keeps its earnings at the all-time peak. If the index can test 3 338 above by holding above this level, the upward potential will possibly target the resistance levels of 3 350 and 3 365. 3 310 and 3 300 support levels can also be followed in 'take profit' sales that the index may face with in this area.  

Support331033503365
Resistance331033003285

Cryptos

BTCUSD

It appears that Bitcoin, which has been subdued for a short period of time at the upper barrier of the ascending channel, is facing with 'take profit' sales in this area. If 'take profit' sales continue on the new trading day, 8 400 support level will be on our radar. If this level is tested, the retreats will probably reach 8 200 and 8 000 support levels. 8 800 and 9 000 resistance levels can be followed in desire for recovery that can be experienced in Bitcoin.  

Support840082008000
Resistance880090009200

Economic Calendar

CountryTime (GMT)Action
usa All Day Martin Luther King, Jr. Day
Germany 07:00 German PPI (Dec)
eu 18:30 ECB President Lagarde Speaks

Central Bank Calendar

RegionMeeting DateActionCurrent Interest Rate
eu 23.01.2020 ECB Interest Rate Decision (Dec)-0,50%
usa 29.01.2020 Fed Interest Rate Decision1,75%
uk 30.01.2020 BoE Interest Rate Decision0,75%

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