Daily Bulletin

Good morning. Comments from Fed Chair Powell highlighting the inflationary and growth-related uncertainties stemming from U.S. tariff policies triggered a sell-off in U.S. equities. Fitch’s downward revision of global and country-specific growth forecasts also contributed to the risk-off sentiment. However, U.S. equity futures and Asian markets are seeking a rebound in positive territory this morning, while European futures are trading flat. In Borsa Istanbul, non-economic headlines and speculation led to losses exceeding 1% yesterday, though we also observed a net capital inflow supported by foreign and institutional buying activity. We maintain our view that the market is in an accumulation phase. Technically, resistance levels to watch are at 9500 and 9580, while support is seen at 9250 and the 9000–9100 range. Today’s key event will be the CBRT’s Monetary Policy Committee meeting. We expect the policy rate (weekly repo) to be raised from 42.5% to 46.0%, while the market consensus leans towards a hold at 42.5%. The key point, however, will be how the CBRT proceeds with funding through the upper band of the interest rate corridor (currently at 46.0%). A move that creates room against potential currency volatility could be more supportive for TL assets in the medium term. On the international agenda, the ECB’s interest rate decision (a 25bps cut is expected) and U.S. housing data will be followed. U.S. markets will be closed tomorrow. Turkey’s 5-year CDS started the day at 342 bps.