How Did The Markets Enter December?

How Did The Markets Enter December? November has been a month of radical economic changes. Exchange rates, which have been on the rise since 2018, started to recover with the changes in the country's economic management. Turkish Lira closed the month of November with an increase after a long time. So how did the markets enter December? US Dollar reached above 7 TL with the eruption of the Brunson crisis which happened in August of 2018 between the US and Turkey, reached its highest level in history by testing above the 8.58 level on November 6. In this period of monetary expansion and positive differentiation of the assets of developing countries in global markets, domestic risks were effective in the record depreciation of the Turkish Lira. Many policy changes occurred after the administration accepted this situation. Turkish Lira, which started to recover with the change of the CBRT and the Treasury Ministers, completed the month of November with an increase after a long time. The most serious part of the recovery occurred on November with Turkey 5 Years CDS side. The risk premium, which decreased to below 240 bp at the beginning of 2020, reached 375 bp at the end of February and the beginning of March due to the death of 33 soldiers in Idlib and the increase in geopolitical risks. Rising steadily after March, the risk premium reached over 600 bps in April, especially with the growth of credit expansion day by day. CDS, which fell below 370 bp with the decisions taken in November, dropped to the lowest level after March, and completed the month below 400 bp. CDS is falling in parallel with the management taking steps in line with its statements. The same situation is also experienced by foreign entry, the entry realized in the last month was recorded as 1.6 million dollars. This data gives a very positive impression. BIST, on the other hand, gained 15 percent in November and broke records in TL. Especially, purchases for banking stocks are at very high levels.   How TL Assets Started the New Month? BIST 100 While the world stock markets rallied, BIST was included in yesterday's profit sales. The index closed the day at 1.283 with a 3.4 percent loss in value. The index, which increased by 1.45 percent on the first day of December, started the day at 1.302 points and is priced positively in the first half of the day. Experts on the subject stated that the index, which was breathing comfortably after the rapid rise in both global and domestic stocks, is not expected to disrupt the general trend and noted that the index can maintain the range of 1,250 - 1,300 points.   USD / TL Rate In addition to the changes in the CBRT presidency and the Treasury, President Erdogan's "new era" statements in economy and law calmed the rise in the exchange rate. In addition to the reforms to be made, market traditions and the policy step that should be done, the exchange rate decreased to 7.50 with the interest rate increase. This level was close to the Monetary Policy Committee levels in October. After the first reaction, the setup reached near 8.0 and tries to keep the balance in the range of 7.70-7.80. On the first trading day of December, the level of 7.95 is the first intermediate resistance in the currency, which is positive towards the level of 7.90, which has been tried many times during the month and exceeded for a short time. In this resistance, the range of 8.05 - 8.15 will be followed. Although there is no change in the long-term increase in the exchange rate, the approach of the management will be effective power in sustaining the decrease for the short term.   EUR / TL Rate In addition to the developments affecting the dollar exchange rate, the ECB (European Central Bank) meeting to be held this month will be closely monitored. Stating that more support is needed to get rid of the negative effects of the coronavirus epidemic and that support will continue as a monetary policy, Lagarde became the determinant of the expansion expectation in asset purchases in the markets. However, the strength in the Euro, which became the major currency in global payments in 2020 and reached the level of 1.20 against the dollar, is not seen as a risk for the ECB at this moment. However, it is expected that steps will be taken in order to maintain this in the background. 9.25 is the most important support level in the short term and 9.65 is the first important resistance in the rises.   Gram Gold During the period of recovery in the Turkish Lira, the price of ounce of gold declined due to positive developments regarding the coronavirus vaccine and accordingly expectations of normalization suppressed gram gold prices to 440 TL. In addition to the increase in the dollar exchange rate on the first trading day of December, an ounce of gold tends to recover from its lowest level of $ 1,764 after July. The recovery to be experienced with the protection of the support of $ 1,766 in ounce gold prices will be followed by the $ 1,818 and $ 1,840 levels. Movements above the $ 1,858 level will be followed gradually. On the gram of gold, 458 TL will be determined as the first intermediate resistance in gains according to the two multiplier effect, while 466 TL will be followed on this resistance. However, for the purchases to increase, the level of 478 TL should be exceeded. In withdrawals, 433 TL is the first important threshold in a short term change in direction.