Summary

  • Cryptocurrencies reversed sharply after recent gains

  • Stocks remain depressed thanks to the rising US yields

  • TRY in the spotlight as CBRT is about to make its decision

The Wednesday’s outlook for the stock markets remains blurry after Wall Street suffered a heavy sell-off in response to US yields breaching 3% barrier. Turkish central bank interest rate decision is the main event in today’s calendar. On the FX front we can see that the Antipodean currencies like AUD and NZD are the biggest underperformers while the greenback shines. Sugar is a subject to some notable losses along with zinc. On the other hand, oil posts moderate gain and aluminium is surging. Gold and silver trade lower pressured by stronger USD.

Cryptocurrencies have thrived recently and today those trends seem to be continuing even as global stocks have gone off the boil because of higher market rates in the US. Moreover, digital currency traders seem to play down the newest revelations from former CEO of PayPal, Bill Harris, who outlined a really gloomy outlook for Bitcoin.

Just a few hours after Italy’s Democratic Party (PD)  stated that it is open to government negotiations with the Five Star Movement (M5S) under the condition the anti-establishment party ends talks with League M5S’ leader Luigi de Maio announced that coalition talks with right-wing alliance failed. This leads us to the situation where two diehard election rivals, PD and M5S, may actually begin talks on forming joint government.

On the currency front the US dollar is still flexing its muscles being up against almost all major currencies in the morning. It has been obviously buoyed by higher yields to some extent, but the slew of robust macroeconomic data has played a role alike.

Investors will be offered one key macroeconomic event on Wednesday and that is the interest rate decision of the Central Bank of the Republic of Turkey. Turkish lira depreciated heavily as of late on the back of political uncertainty and unreasonable monetary decision therefore today’s decision is closely watched by market participants.