Yapı Kredi Research: Markets Stabilize After Ceasefire, but Uncertainty Lingers
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The ceasefire announced on April 8 has helped ease risk sentiment across global markets, but underlying uncertainties remain elevated. Disruptions in energy flows, persistent inflation pressures, and geopolitical tensions continue to cloud the outlook, keeping investors cautious despite signs of short-term relief.
Ceasefire Brings Relief, but Fragility Persists
The ceasefire and ongoing diplomatic efforts have led to a noticeable decline in global risk premiums. However, the stabilization remains fragile.
While war fatigue and the deepening global energy crisis may reduce the likelihood of renewed escalation, markets remain wary of setbacks. Investors are increasingly aware that the path toward lasting peace will be uneven and uncertain.
Strait of Hormuz Remains a Critical Risk
From Lebanon to the Strait of Hormuz, uncertainty over the durability of the ceasefire continues to dominate the geopolitical landscape.
The failure of tanker traffic to normalize through Hormuz—one of the world’s most critical energy corridors—keeps supply concerns elevated. A full recovery in flows will be a key indicator for both energy markets and broader financial stability.
Iran Signals Ongoing Tensions
Iranian President Masoud Pezeshkian criticized Israeli operations in Lebanon, accusing the United States and Israel of violating the ceasefire framework.
He warned that continued military actions could render diplomatic negotiations meaningless, highlighting the fragile nature of the current truce.
European Bond Markets Under Pressure
In Europe, rising public debt levels—particularly in Germany—are adding strain to sovereign bond markets.
Higher borrowing needs, combined with elevated energy costs, are pushing yields upward and reinforcing expectations that interest rates may remain higher for longer.
Mixed Signals from the U.S. Economy
Recent U.S. data present a mixed macroeconomic picture:
- PMI indicators came in below expectations
- Consumer spending showed signs of weakening
- Core inflation remains elevated
The Federal Reserve’s preferred inflation gauge, PCE, also surprised to the upside, reinforcing concerns that inflationary pressures persist.
As a result, expectations for rate cuts have been pushed further out, with markets now pricing a prolonged period of tight monetary policy.
Global Markets Show Tentative Optimism
Despite ongoing risks, global markets are displaying cautious optimism:
- U.S. futures are up around 0.5%
- Japan’s Nikkei has risen 1.6%
- Chinese and Hong Kong markets are modestly higher
The U.S. 10-year Treasury yield stands near 4.29%, while the dollar index (DXY) is holding just below 99.
Energy and Commodity Markets Remain Volatile
Oil prices initially declined following the ceasefire but have since rebounded as supply concerns persist.
This volatility underscores the ongoing sensitivity of energy markets to geopolitical developments, with broader implications for global inflation.
Turkey: FX Stability and Reserve Recovery
In Turkey, the lira is showing a mild depreciation trend, with USD/TRY trading around 44.60.
Key technical levels:
- Downside: 44.00 – 43.70
- Upside: 44.70 – 45.00
Central bank data indicate an improvement in reserves:
- Gross reserves rose to $161.6 billion
- Net reserves (excluding swaps) increased to $18.4 billion
Turkey’s CDS risk premium has declined to 243 basis points, signaling improved investor sentiment.
Morning Brief: Uncertainty Persists, Hope Builds as Israel–Lebanon Dialogue Eases Markets
Limited FX Demand from Households
Foreign currency deposits increased by $2.8 billion in the week ending April 3, driven primarily by corporate accounts. Household demand for foreign exchange remained subdued.
This trend suggests that confidence in the lira has not deteriorated significantly despite recent volatility.
Bonds and Equities Search for Direction
Bond markets remain sensitive to developments around the ceasefire and central bank policy.
In equities, technical levels are increasingly important:
- Sustained levels above 13,700 could support further upside
- A move below 12,430 may trigger renewed selling pressure
Banking stocks are closely watched, with 12,700 identified as a key support level.
Conclusion: Fragile Balance Holds
While the ceasefire has provided temporary relief, markets continue to face a complex and uncertain environment.
Energy supply disruptions, persistent inflation, and geopolitical risks remain key challenges. As a result, investor sentiment is likely to stay cautious, with markets navigating a fragile balance in the near term.
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