Daily Turkish lira foreign exchange rate predictions and volatility data. Daily Turkish lira foreign exchange rate predictions and volatility data. TRY - Turkish lira Predictions and volatility data. Page updated: 2019-06-21 19:10 EST DST (2019-06-21 23:10 UTC).
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After suffering their worst quarterly decline in a decade to close out 2018, stocks bounced back in the first quarter of 2019 and erased most of their losses. The large‑cap benchmarks ended within roughly 4% of the all‑time highs they established in September 2018, while the S&P MidCap 400 Index and small‑cap Russell 2000 Index remained 8% and 12% from their peaks, respectively. Reflecting improved sentiment and the return to a “risk on” environment, volatility—as measured by the Cboe Volatility Index (VIX)—moderated throughout the quarter.The technology‑heavy Nasdaq Composite Index performed best for the period. Within the S&P 500 Index, tech shares also performed well, gaining nearly 20% on a total return basis (including dividends), followed by real estate and industrials shares, which gained 18% and 17%, respectively. Energy shares were also particularly strong, helped by a rebound in oil prices. Health care shares performed worst, weighed down by some prominent failures in new drug tests and concerns over CVS Health’s attempts to integrate its recent takeover of Aetna. Financial shares also lagged as a plunge in long‑term interest rates threatened bank lending margins.
The monetary policy environment for equities brightened considerably in the quarter, providing a powerful tailwind to sentiment. The S&P 500 scored its best daily gain for the quarter on January 4, after Federal Reserve Chairman Jerome Powell stressed to a group of economists that the Fed would not hesitate to respond with all the tools at its disposal to counteract an economic downturn or financial turmoil. Minutes from the Fed’s December meeting also encouraged investors, with policymakers citing their awareness of “concerns about downside risks evident in financial markets and in reports from business contacts.”The Fed’s signals following its January 29–30 policy meeting provided further encouragement, helping send the S&P 500 Index to its second‑biggest daily gain for the quarter. The central bank decided to keep rates steady, as was widely expected, but investors were cheered by an unexpectedly “doubly dovish” post‑meeting statement, which removed all references to further rate increases and called into question whether the Fed would continue to wind down its balance sheet. Stocks jumped again after the Fed’s next meeting on March 19–20.
The summary of individual policymakers’ economic and policy projections released after the meeting showed that 11 out of the 17 Fed officials who set policy now expect no rate hikes in 2019, while four expect just one. Indeed, markets began pricing in a significant possibility that the Fed’s next move would be to cut rates. The downside of the about‑face in Fed policy was the reason driving the change—continuing signs of a moderation in U.S. Growth and a much sharper slowdown overseas.
Windows live mail keeps downloading old emails account. Chinese and European growth expectations ratcheted lower throughout the quarter, and Wall Street had one of its worst days on March 22, following news of a sharp contraction in the export‑sensitive German manufacturing sector. Manufacturing continued to expand, but at a significantly slower pace. Housing sector also weakened, particularly in terms of new construction. Consumer spending and business investment generally disappointed as well, held down in part by the partial federal government shutdown, which lasted through most of January. Labor market signals remained strong through most of the quarter, but February job gains, reported on March 1, were at the lowest level in 17 months.Corporate profit growth also appeared to be moderating, although not as much as expected.
Investors appeared to respond positively overall to fourth‑quarter 2018 earnings reports as they were released in January and February. According to FactSet, overall quarterly profits for the S&P 500 rose 13.3% in the quarter versus a year earlier, somewhat above estimates. Hopes for a trade deal between the U.S.
And China improved as the quarter progressed, providing an additional boost to markets. Early in the quarter, stocks rose after President Trump tweeted that trade talks were “going very well” and again on February 12, after he told reporters that he would be willing to extend a deadline to increase tariffs if the two nations were nearing a deal, which he did two weeks later. On March 22, President Trump told an interviewer that the two sides were “getting very close” to a deal as U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin prepared to travel to Beijing for the next round of face‑to‑face talks. Mnuchin’s tweet that the talks had been constructive seemed to be one factor in the market’s strong rally on March 29, the last trading day of the quarter. The Fed’s dovish turn and growing hopes for a trade deal have moderated two of the primary sources of uncertainty that derailed markets late in 2018. The growth worries that emerged in late 2018 remain a more persistent source of concern, but it seems likely that a recession will be averted in the coming year.
Earnings growth will be harder to come by, however, as the impact of the December 2017 tax cuts on year‑over‑year comparisons rolls off and fiscal stimulus wanes. This could favor an active approach to investing, along with careful fundamental research to find companies able to leverage competitive advantages to prosper in a more challenging environment. Additional DisclosuresLondon Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2019. FTSE Russell is a trading name of certain of the LSE Group companies. “Russell ®” is a trade mark of the relevant LSE Group companies and is used by any other LSE Group company under license.
All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.S&P Indices are products of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”), and have been licensed for use by T. Rowe Price. Standard & Poor’s ® and S&P ® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones ® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by T. Rowe Price.
T. Rowe Price is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P Indices. Fixed Income Markets. The yield of the benchmark 10‑year Treasury note tumbled in the first quarter as Federal Reserve policymakers signaled that no interest rate hikes are expected in 2019 amid indications that the U.S. Economy was slowing.
After starting the year at 2.69%, the 10‑year Treasury note traded in a fairly narrow range for the first two months of the year. However, the 10‑year yield slid lower in March and hit a 15‑month low of 2.39% before finishing the quarter at 2.41%. The 10‑year Treasury yield has fallen from a 12‑month high of 3.24% on November 8, 2018. (Bond yields and prices move in opposite directions.). After its March monetary policy meeting, the Fed released a summary of economic forecasts that showed that the majority of Fed officials who set policy now expect no rate hikes in 2019—a significant change from the previous forecast in December, which indicated that two rate hikes were likely this year. The central bank had started to move away from its tightening bias when it announced in January that it would be taking a more patient approach in assessing policy changes. At the end of the period, the futures market showed that investors had an even more dovish outlook than the Fed and were anticipating at least one rate cut by year‑end.At the March post‑meeting press conference, Federal Reserve Chairman Jerome Powell said that the policy revision was a result of a changing economic backdrop.
He acknowledged that growth in U.S. Consumer and business spending had slowed in recent months and pointed to a more pronounced slowdown in European economies. The Fed also announced that it will conclude the reduction of its Treasury holdings at the end of September.Some portions of the Treasury yield curve inverted during the period, as yields on securities with shorter maturities declined less than those offered by longer maturities. Three‑month Treasuries yielded more than the 10‑year note for nearly a week in March—its first inversion since 2007—but finished the month with a more normal, although nearly flat, curve. An inverted curve has often predicted recessions in the past, although there have also been false positives, and the start of a downturn can lag an inversion by a significant amount of time. The longer‑maturity end of the yield curve remained upward sloping during the quarter.
Accommodative monetary policy news and the decline in Treasury yields helped drive positive results in nearly all fixed income segments for the quarter. Corporate bonds were the strongest sector in the Bloomberg Barclays U.S. Aggregate Bond Index, supported by robust demand and manageable levels of new issuance. Mortgage‑backed securities slightly outperformed Treasuries during the period.
Treasury inflation‑protected securities outperformed nominal Treasuries as inflation expectations rose after touching the lowest level since 2017 at the start of the year.Municipal bonds also produced solid returns and outperformed Treasuries. Inflows to the asset class were at historically high levels from the middle of January through February, and the new issuance calendar was relatively light. Puerto Rico muni bonds outperformed the broader market after a federal judge approved the restructuring of $17 billion of COFINA bonds. Bondholders agreed to a deal that would split revenues from the sales‑tax‑backed debt with the commonwealth’s government. It was the largest restructuring so far in the U.S.
Territory’s bankruptcy proceedings. High yield corporate bonds bounced back from a fourth‑quarter sell‑off and recorded their best first quarter since 2003. Below investment‑grade bonds easily outpaced the broader fixed income universe for the three‑month period, supported by solid demand and equity strength. A six‑week issuance drought ended when energy company Targa Resources sold $1.5 billion of new bonds on January 10, but supply remained relatively limited. In issuer‑specific news, telecommunication services company Windstream filed for bankruptcy protection in what will be one of the largest high yield defaults in the past five years; however, fundamentals in the sector remain solid, and default rates are well below long‑term averages. Floating rate loans underperformed high yield bonds for the quarter amid outflows.
Bond returns in developed non‑U.S. Markets were positive in dollar terms, as yields in many developed markets declined and bond prices rose due to signs of slowing global growth and the Federal Reserve’s dovish stance on future rate increases. In a major policy reversal, the European Central Bank (ECB) altered its forward guidance at its March meeting, stating that rates would remain unchanged at least through the end of 2019. The dovish announcement came as the bank lowered its 2019 growth forecast to 1.1% from 1.7%. The ECB also announced a third series of its targeted longer-term refinancing operations (TLTRO) program, which allows banks to borrow at the 0% refinancing rate for two years and is intended to help avoid a credit squeeze that could weigh on the European economy. Central banks in Japan and the UK left their monetary policy unchanged during the period.
Yields of benchmark 10‑year government debt in Germany and Japan fell below zero for the first time since late 2016 as investors sought out safer debt. Emerging markets bonds produced strong gains, supported by significant inflows and progress on U.S.‑China trade talks, as the asset class rebounded from weakness in 2018.
In country‑specific developments, several emerging markets issuers struggled with currency weakness. In response to a sliding lira, Turkey’s central bank tightened monetary policy and took steps to deter bets against the lira and stem a decline in foreign currency reserves. Credit spreads on Turkish government bonds widened to levels not seen since late 2018.
Meanwhile, the Argentine peso reached new all‑time lows versus the U.S. Dollar, possibly due to concerns about Argentina’s October elections. Mark Vaselkiv, T. Rowe Price’s chief investment officer of fixed income, notes that global credit cycles are increasingly unsynchronized, which presents risks and opportunities for fixed income investors. He believes the best opportunity for long‑term investors is to invest in countries such as Brazil and China, where central banks are attempting to aid economic recoveries by cutting rates and pursuing other accommodative policies.
Conversely, there is danger in overweighting countries and regions during periods of expansion and at the cusp of a potential downturn. While there are concerns about the U.S. Being late in the credit cycle, one thing that hasn’t changed is the overall strength of the U.S.
Consumer, says Vaselkiv, which should provide a solid foundation for the U.S. Economy for the foreseeable future. Additional DisclosuresBloomberg Index Services Limited. BLOOMBERG ® is a trademark and service mark of Bloomberg Finance L.P. And its affiliates (collectively “Bloomberg”). BARCLAYS ® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license.
Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.Information has been obtained from sources believed to be reliable, but J.P. Morgan does not warrant its completeness or accuracy. The index is used with permission. The index may not be copied, used, or distributed without J.P. Morgan’s prior written approval. Copyright © 2019, J.P.
Morgan Chase & Co. All rights reserved. International Stocks. International stock markets rose in the first quarter, rebounding from a heavy sell-off in the fourth quarter of 2018, but still underperformed U.S. Shares in dollar terms. Assurances from the U.S. Federal Reserve (Fed) and other central banks that they would use all the tools at their disposal to counteract an economic downturn or financial turmoil reassured investors and provided a strong tailwind for riskier assets.
Turkish Lira Forecast 2019 Bloomberg Chart
Investors were also optimistic that the U.S. And China would soon reach an agreement to end their yearlong trade dispute.Within the MSCI EAFE Index—which tracks developed markets in Europe, Australasia, and the Far East—all 11 sectors advanced, led by gains in information technology and real estate.
Growth stocks in the EAFE index rose 12.18%, outperforming value shares, which returned 8.08%. Like the Fed, the European Central Bank (ECB) adopted a surprisingly dovish stance and announced that it would keep short‑term interest rates unchanged at least through the end of 2019.
ECB President Mario Draghi acknowledged the toll that trade tensions and geopolitical concerns have taken on the region’s economy. Earlier in March, the ECB slashed its growth forecast for 2019 to 1.1% from an earlier forecast of 1.7%. To give a further boost to the economy, the ECB announced a third round of Targeted Longer‑Term Refinancing Operations (TLTRO III). This program, which will provide cheap two‑year loans to banks, is designed to encourage bank lending to help stimulate the economy. In March, the yield on the benchmark 10‑year German bund traded below 0% for the first time since 2016, prompting the bank to discuss measures that could help it maintain an ultra‑accommodative policy for longer and perhaps loosen the policy further. After months of politicking, in late March, the British Parliament voted against Prime Minister Theresa May’s Brexit deal for the third time. T. Rowe Price Fixed Income Portfolio Manager Quentin Fitzsimmons said uncertainty deepened considerably in the wake of the vote.
Usd To Turkish Lira Bloomberg
He said possible outcomes could include the loss of a prime minister, European Union (EU) backlash about a long extension, and a snap election. Before the vote, EU negotiator Michel Barnier warned Britain that it would have until April 12 to tell the EU what it wants to do in the event that the vote failed. Japanese equities rallied in the first quarter, returning 6.85%, as measured by the MSCI Japan Index, but underperformed the broad EAFE index. The Bank of Japan (BOJ) followed the lead of many other central banks in acknowledging increased risks and slowing global growth.
In particular, it noted that exports and output have been significantly affected by slowing global growth. In January, Japan’s exports posted their biggest decline in more than two years, and factory output slumped. The BOJ maintained its pledge to keep short‑term rates at ‑0.1% and target a 10‑year government bond yield of about 0%. Dollar-denominated Chinese stocks and yuan‑denominated A shares led gains, rallying roughly 18% and 33%, respectively, boosted by hopes for a resolution to the U.S.‑China trade standoff and by foreign buying ahead of a widely expected MSCI decision to increase the weighting of Chinese shares in its global indexes.
In Latin America, Brazilian stocks rose roughly 8%, as investors bet that the administration of newly elected President Jair Bolsonaro would overhaul the country’s bloated pension system and push through other fiscal reforms. Mexican stocks advanced more than 5%, and the country’s central bank left its key rate unchanged at 8.25% in March as it cited credit risks related to state oil company Pemex and the government. Stocks in Chile, Colombia, and Peru enjoyed significant gains as oil and copper prices rose amid hopes that an end to the U.S.‑China trade battle would remove a global growth headwind and boost demand commodities. The MSCI EM Europe, Middle East, and Africa Index gained 5.60%. Russian stocks surged roughly 12% as talk of U.S. Sanctions subsided and prices surged for crude oil, the country’s chief export.
Prices for Brent crude oil, the global benchmark, climbed 27% in the quarter amid efforts by major exporters to restrict supply. South African stocks rose almost 5%, as investors bet that the country’s economy would turn around this year.
South Africa’s central bank kept its key rate at 6.75% but in March cut its annual economic growth forecast to 1.3% from a prior 1.7% estimate due to a nationwide electricity crisis centered on Eskom, the cash‑strapped state utility. Turkish stocks fell nearly 3%, pressured by big declines in March when the lira weakened sharply against the U.S. Turkish assets slumped at quarter‑end after data showing an unexpected fall in Turkey’s cash reserves raised suspicions that the central bank was using its reserves to prop up the lira ahead of March 31 municipal and local elections, leading foreign investors to sell the currency. We expect global growth to moderate against the backdrop of ongoing trade tensions, slowing Chinese demand, and geopolitical disrupters—including policy uncertainty in Italy and, to some extent, in France—as well as uncertain Brexit negotiations.
On the bright side, domestic demand in the eurozone area has been resilient thus far and appears to be strengthening. However, a continuation of trade tensions could exacerbate the slowdown, especially if these tensions spread to EU and trade-driven economies in countries like Germany.
In our view, Chinese monetary and fiscal stimulus have the greatest potential to drive global growth higher. Lower oil prices should give growth a boost among oil importers, including Europe, China, and India. While some of the political risks that had hung over emerging markets countries, such as elections in Brazil and Mexico and severe currency weakness in Turkey, have eased, myriad geopolitical and trade issues remain that could spark risk‑related selling and derail markets. Other challenges to the outlook for global equities include the possibility of central bank policy missteps and the rising popularity of anti‑establishment and populist political parties.
Additional DisclosuresMSCI and its affiliates and third party sources and providers (collectively, “MSCI”) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.
Emerging Markets Stocks. Emerging markets stocks rallied in the first quarter of 2019 as the U.S. Federal Reserve and other central banks turned less hawkish, giving foreign investors impetus to buy higher‑risk assets. Emerging markets assets got a boost after the Federal Reserve’s March policy meeting, when policymakers left the fed funds rate unchanged and forecast no rate increases this year.
The Fed’s dovish tilt—which came after minutes from its January policy meeting revealed officials’ growing worry about the health of the U.S. Economy and their “patient” approach to raising rates—reassured investors that foreign capital would continue flowing into the developing world. A lull in U.S.‑China trade tensions also helped sentiment as high‑level talks continued in Washington and Beijing and both countries inched closer to an agreement. Despite deep differences in some areas, U.S. And Chinese officials are reportedly keen to broker a deal by the end of April to head off an escalation in their trade battle. All 11 sectors in the MSCI Emerging Markets Index advanced, led by the consumer discretionary sector, which surged nearly 21%.
Health care stocks rose the least, adding less than 4%. Dollar-denominated Chinese stocks and yuan‑denominated A shares rallied roughly 18% and 33%, respectively, amid hopes for a resolution to the U.S.‑China trade standoff and foreign buying ahead of a widely expected MSCI decision to increase the weighting of Chinese shares in its global indexes.
China lowered its annual growth target to between 6.0% and 6.5%, down from last year’s 6.6% expansion, as most indicators showed its economy continued to slow. Indian stocks added about 7% as military tensions with Pakistan eased and speculation rose that the ruling coalition led by Prime Minister Narendra Modi would win reelection in May by a sizable margin, raising expectations that the government would spur investment in sectors such as construction and infrastructure. Southeast Asian stock markets rose, led by the Philippines’ roughly 8% gain.
Central banks in Indonesia, the Philippines, Malaysia, and Thailand left their benchmark interest rates on hold during the quarter as the Fed’s pause in monetary tightening eased pressure on emerging markets assets. Brazilian stocks rose roughly 8%, driven by a rally in January as investors bet that the administration of newly elected President Jair Bolsonaro would overhaul the country’s bloated pension system and push through other fiscal reforms. Recent indicators, however, showed that Brazil’s recovery from the 2015–2016 recession was losing steam.
In March, Brazil’s central bank cut its 2019 economic growth forecast to 2.0% from a 2.4% estimate in December and kept its benchmark Selic interest rate at a record low 6.5%. Mexican stocks advanced. Mexico’s central bank left its key rate unchanged at 8.25% in March as it cited credit risks related to state oil company Pemex and the government. Earlier in the month, Fitch Ratings slashed its 2019 economic growth forecast for Mexico to 1.6% from 2.1% and S&P Global Ratings lowered its outlook for the country’s sovereign debt to negative from stable.
Both agencies cited policy changes under President Andres Manuel Lopez Obrador, who took office in December. Stocks in Chile, Colombia, and Peru gained as oil and copper prices rose amid hopes that an end to the U.S.‑China trade battle would remove a global growth headwind and boost demand for the region’s commodity‑driven economies. Turkish stocks fell nearly 3%, weighed by a sell‑off in March when the lira weakened sharply against the U.S. Turkish assets slumped at quarter‑end after data showing an unexpected fall in Turkey’s cash reserves raised suspicions that the central bank was using its holdings to prop up the lira ahead of March 31 elections, leading foreign investors to dump the currency. Turkey entered a recession for the first time in a decade in the final quarter of 2018, when its economy shrank for the second straight quarter. Russian stocks surged roughly 12% as talk of U.S.
Sanctions subsided and prices rose for crude oil, the country’s chief export. Prices for Brent crude oil, the global benchmark, climbed 27% in the quarter amid efforts by major exporters to restrict supply.
Russia’s central bank left its benchmark interest rate at 7.75% during the quarter but hinted that rate cuts were possible as a stronger ruble and weak consumer demand helped dampen inflation. South African stocks rose almost 5%, lifted by gains in January as investors bet that the country’s economy will turn around this year.
South Africa’s central bank kept its key rate at 6.75% but in March cut its annual economic growth forecast to 1.3% from a prior 1.7% estimate due to a nationwide electricity crisis centered on Eskom, the cash‑strapped state utility. South Africa received good news at the end of March when Moody’s said it would not update its investment‑grade rating on the country’s sovereign debt or outlook.
The news relieved those who had worried that the Moody’s review would result in a ratings downgrade. We are optimistic about the longer‑term outlook for emerging markets. Most developing countries have smaller current account deficits, larger foreign exchange reserves, and more flexible currencies than they did in previous decades, reducing the risk of a financial crisis. Compared with developed markets, most emerging markets have more attractive demographics and a stronger tailwind from rising consumption. Corporate earnings in emerging markets have recovered after years of disappointing performance, and stocks in the asset class are attractively valued versus their developed market peers. Near‑term headwinds include an escalation in global trade tensions and uneven global economic growth. However, we believe that careful stock selection is the key driver of good returns over time as emerging markets continue to show wide dispersion in the performance of individual countries and companies.
Additional DisclosuresMSCI and its affiliates and third party sources and providers (collectively, “MSCI”) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction.
None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Global Capital Markets Environment. Stock indexes surged in the first quarter of 2019, as the market rebounded from its late‑December 2018 lows. Equities were lifted by fourth‑quarter corporate earnings reports that were generally better than expected—although earnings growth moderated from the robust pace earlier in 2018.
Another tailwind was that the Federal Reserve turned dovish and stopped raising short‑term interest rates while central bank officials assessed the economy and the effects of previous rate increases. Also, the end of the federal government’s partial shutdown in late January removed a major source of uncertainty. In addition, investors were hopeful—following reports of productive trade talks and U.S. President Donald Trump’s delay of a tariff increase on Chinese goods—that the U.S. And China would soon reach a resolution to their yearlong trade dispute.Small‑ and mid‑cap stocks narrowly outperformed their large‑cap peers. The small‑cap Russell 2000 Index returned 14.58% versus 14.49% for the S&P MidCap 400 Index and 13.65% for the large‑cap S&P 500 Index.
As measured by various Russell indexes, growth stocks strongly outperformed value stocks across all market capitalizations.In the large‑cap universe, as measured by the S&P 500, all sectors advanced. Information technology firms did best, lifted, in part, by favorable corporate earnings reports. The interest rate‑sensitive real estate sector―which includes real estate investment trusts that have attractive yields relative to other sectors―also performed very well, as longer‑term interest rates plummeted during the quarter, particularly in March. Energy stocks also fared very well, as the sector was buoyed by a vigorous rebound in U.S. Oil prices from late‑December lows stemming, in part, from global production cuts. Industrials and business services stocks posted strong returns as the increasing likelihood of a U.S.‑China trade deal helped lift shares.
Industry heavyweight Boeing, however, suffered a sharp decline in March following a second fatal crash involving its new 737 MAX 8 airliner since the end of October 2018. Consumer discretionary and communication services stocks slightly outperformed the broad index. Health care and financial stocks lagged with relatively mild gains. Domestic bonds produced strong positive first‑quarter returns: The Bloomberg Barclays U.S. Aggregate Bond Index returned 2.94%. The Federal Reserve kept short‑term interest rates unchanged, as expected.
Turkish Lira Forecast 2019 Bloomberg News
Perhaps the most notable news from the Fed’s March 19–20 meeting was that 11 of 17 Fed officials who set policy now expect no rate hikes in 2019. Fed Chairman Jerome Powell acknowledged that growth in U.S. Consumer and business spending had slowed in recent months and pointed to an even larger slowdown in European economies. The Fed’s dovish tone helped send longer‑term bond yields down sharply. The 10‑year Treasury note yield fell to levels not seen since late 2017, and in March, it fell below the yield of the three‑month Treasury bill.
Historically, such inversions of the yield curve have often been an early indicator of a recession. However, T. Rowe Price managers observe that extraordinary measures by central banks in recent years to hold down long‑term interest rates may be making the signal less reliable. In the investment‑grade bond universe, long‑term Treasuries and corporate bonds fared best as long‑term interest rates declined. Mortgage‑backed securities lagged, as falling long‑term rates could lead to increased mortgage prepayments and refinancing activity.
Asset‑backed securities also lagged with mild gains. Municipal bonds performed in line with taxable bonds. High yield bonds strongly outperformed investment-grade issues―helped by narrowing credit spreads, increased demand from yield‑seeking investors, and rising oil prices that benefited energy sector issuers.Stocks in developed non‑U.S.
Equity markets performed well but underperformed U.S. Shares in U.S.
Dollar terms. The MSCI EAFE Index, which measures the performance of stocks in Europe, Australasia, and the Far East, returned 10.13%. New Zealand and Hong Kong shares outpaced developed Asia, returning roughly 17% and 16%, respectively. Japanese shares lagged significantly, returning almost 7% for the quarter. In Europe, Belgian stocks led the way, returning over 16%.
UK shares surged almost 12%, despite Brexit‑related uncertainty. Late in the quarter, the European Union (EU) offered UK Prime Minister Theresa May an extension until April 12 to pass a plan through British Parliament for the UK’s exit from the EU. If Parliament approves, the UK will be able to stay in the EU until May 22. Norway―one of Europe’s largest oil producing nations―lagged the region with a 7% gain despite rising oil prices. Stocks in emerging markets performed mostly in line with developed non‑U.S. The MSCI Emerging Markets Index returned 9.95%.
Chinese stocks outpaced Asian markets as onshore Chinese A shares surged over 33% for the quarter. China’s A share market rose strongly in the closing weeks of the period after the Chinese government said it was considering cutting some interest rates and banks’ reserve requirements to strengthen economic growth. President Trump’s late‑March comments about “getting very close” to a trade deal with China also benefited markets. In addition, investors welcomed MSCI’s plan to increase China’s representation in some of its indexes later this year. In emerging Europe, Russian stocks soared over 12% for the period as stocks benefited from rising oil prices. Turkish shares were extremely volatile during the quarter and fell almost 3%. Shares surged early in the quarter as the market partially rebounded from last year’s poor performance.
Late in the quarter, however, the central bank’s decision to suppress domestic lira liquidity weighed on various Turkish assets. In Latin America, most markets advanced during the quarter, led by Colombia, which returned almost 25%. Brazil also had strong returns of over 8%. Brazil’s new president Jair Bolsonaro took office on January 1, and equities were propelled by expectations that he would quickly pursue business‑friendly policies and pension reform. Brazilian shares reached all‑time highs during the quarter.Bond returns in developed non‑U.S.
Markets were positive in dollar terms, as yields in many developed markets declined and bond prices rose due to global growth concerns and a number of major central banks turning more dovish. However, a stronger U.S. Dollar versus some currencies reduced returns to U.S. In the UK, bond yields fell due to Brexit uncertainty, while a stronger pound boosted returns to U.S.
In the eurozone, bond yields declined due, in part, to the European Central Bank’s announcement in March that it would launch a new round of targeted longer-term refinancing operations to encourage bank lending to help stimulate the economy. In Japan, the 10‑year Japanese government bond yield slipped into negative territory as the Bank of Japan left its ultra‑low interest rate policies unchanged. Additional DisclosuresBloomberg Index Services Limited. BLOOMBERG ® is a trademark and service mark of Bloomberg Finance L.P. And its affiliates (collectively “Bloomberg”).
BARCLAYS ® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.Information has been obtained from sources believed to be reliable, but J.P. Morgan does not warrant its completeness or accuracy. The index is used with permission. The index may not be copied, used, or distributed without J.P.
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(Bloomberg) - The Turkish lira reversed a drop to a record low after the central bank said it was monitoring markets and would take necessary steps, a sign policy makers are getting closer to taking action to stem a rout.The central bank’s governor will meet Recep Tayyip Erdogan, according to local television reports on Wednesday, after Turkey’s president said he plans to take more responsibility for monetary policy following elections next month. The lira has been one of the currencies hardest hit by an emerging-market selloff this year amid concern the nation’s interest rates are too low given a current-account deficit and double-digit inflation.The central bank “is closely monitoring the unhealthy price formations in the markets. Necessary steps will be taken, also considering the impact of these developments on the inflation outlook,” the Ankara-based monetary authority said in a statement on its website.“Now we just have to see whether ‘necessary’ is the same to the central bank as it is to the market,” said Henrik Gullberg, a strategist at Nomura International Plc. “The market needs a circuit breaker, that circuit breaker can only be a prohibitively aggressive rate hike.”The currency traded 0.8 percent higher at 4.4133 per dollar, after earlier slumping as much as 1.2 percent to a record 4.5010. The yield on 10-year local currency notes fell 16 basis points to 14.55 percent, after earlier surging to a record 14.94 percent.To contact the reporter on this story: Constantine Courcoulas in Istanbul at ccourcoulas1@bloomberg.net.To contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, Neil Chatterjee, Ven Ram©2018 Bloomberg L.P.