Daily Bulletin

Good morning. Global risk appetite appears calm this morning. U.S. and European futures are trading flat to slightly negative, while Asian futures remain volatile. Former President Trump’s decision to postpone tariffs on the EU has brought a somewhat optimistic tone to Wall Street. In addition, the Consumer Confidence Index, which came in above expectations, provided further support for U.S. indices. The data helped ease concerns that had been building recently due to tariff-related uncertainty. Despite weak sales figures in Europe, Tesla shares gained over 5%, driven by easing trade tensions and Musk’s emphatic “hands-on, 24/7” messaging. All eyes are now on Nvidia’s Q1 FY2025 earnings announcement scheduled for this evening. While there is strong potential to beat consensus expectations, market pricing will likely be shaped more by the company’s forward guidance for the next quarter and full year. In Europe, Trump’s tariff delay and the ECB’s continued efforts toward its 2% inflation target have contributed to fresh record highs in the German DAX index. Domestically, Borsa Istanbul continues to decouple from global sentiment with inverse pricing behavior. Despite no significant net capital outflows, the loss of momentum we previously highlighted remains intact. Following the test of 9,770 points on May 14, the index has maintained its downtrend. Trading volume also remained low yesterday, at TRY 68 billion, with the BIST100 closing just above 9,200 points. A break below the 9,300 level brings the 9,000–9,100 band into focus as key support. On potential intraday rebound moves, initial resistance levels are at 9,350 and 9,450 points. For Borsa Istanbul to refocus on its long-term potential, several catalytic factors are needed: a decline in interest rates, a revival in economic growth, a rebound in corporate earnings, and reduced geopolitical or non-economic risks both domestically and globally. Therefore, we do not anticipate a meaningful rally in the short term, and consider any day-to-day recovery attempts as part of a normal market reaction. Next week’s May inflation data release will be significant in shaping interest rate expectations. On the local front, the Economic Confidence Index for May will be released at 10:00 a.m., while markets will also monitor the FOMC meeting minutes later in the evening. Turkey’s 5-year CDS risk premium has opened the day at 307 basis points, up slightly compared to yesterday.