Daily Bulletin

Good morning. U.S. President Trump’s announcement that tariffs on Mexico and Canada will take effect next week (Tuesday, March 4) and that existing tariffs on China, currently at 10%, will be increased by an additional 10% is triggering a sell-off in global markets. While U.S. stock markets experienced declines of up to 3% yesterday, futures are flat this morning. In Europe, stock markets closed flat yesterday, but futures are down nearly 1% this morning. Meanwhile, in Asia, we are seeing declines of up to 3% again this morning. In Borsa Istanbul, a strong rebound supported by capital inflows has been taking place for the past two days. The BIST 100 index closed yesterday at 9,741, thereby reclaiming its position above the 200-day exponential moving average, which currently stands at 9,600. We maintain our view that the index will not remain below the 200-day average for an extended period; however, volatility is expected to persist depending on news flow. As today marks the last trading session of February, position closures for arbitrage purposes may add further pressure on BIST. On today’s agenda, domestic unemployment rates and Q4 2024 growth data will be monitored. We estimate that after contracting for two consecutive quarters on a quarterly basis in Q2 and Q3 2024, the Turkish economy returned to growth in Q4 2024, thereby exiting a technical recession. Our annual growth forecast for Q4 2024 is 2.8%, while our full-year growth estimate for 2024 stands at 3.1%. In the U.S., core personal consumption expenditures will be closely watched today. Turkey’s 5-year CDS starts the day at 251 basis points.