Bank of Turkey Surprise, Treasuries Rise and Weak Jobless

Regardless of the formally lesser importance, the Bank of Turkey surprise can be considered as the most interesting yesterday's event. Yesterday we wrote that the Central Bank is likely to raise the rate, and the market consensus was an increase of 1% to 18%. In fact, the Bank of Turkey decided to take preventive measures to combat inflation and immediately raised the rate by 200 basis points to 19%.

This, of course, was the most powerful reason for buying the Turkish lira. By the end of the day it strengthened by almost 3%. Besides, this is far from the end. So those who didn't buy the lyre yesterday or the day before yesterday should not despair and buy it today.

The Bank of England left the monetary policy parameters unchanged as expected by the markets.

Also, yesterday, another notable and significant event was the achievement by the yield of 10-year US Treasury bonds to 14-month lows. Growth against such a background will be increasingly difficult for the US stock market, despite the successful dripping of vaccinations and the US economy imminent full opening.

Although here (economic recovery) yesterday gave cause for reflection. The data on the number of applications for unemployment benefits unexpectedly came out much worse than forecasted (meaning the initial applications). Instead of the expected 700K, the fact was 770K, which cannot but inspire concern. Especially after those optimistic forecasts that the Fed gave to the markets on Wednesday.

Today may well become a day of massive sales in risky asset markets. The fact is that this Friday the mass of options and futures contracts on the US stock market, the so-called "quadruple witching day", expires. On such days, volatility is increased, so in any case, today you should be double careful, or, to be more precise, four times.