Daily Bulletin

Good morning. It has been reported that the United States and China have reached agreements on certain issues in their ongoing negotiations and have arrived at a framework. While this development is supportive for global markets, U.S. and European equity futures are trading in negative territory this morning. This is largely due to the fact that the negotiations had already been priced in to some extent, coupled with rising protest activity in the U.S. and expectations of an increase in today’s inflation data set to be released. In Asia, equity markets are generally trading higher. Borsa Istanbul continues to exhibit positive momentum and capital inflows, and we anticipate that the upward move toward the 9,800–10,000 resistance range will persist. The CBRT’s (Central Bank of the Republic of Turkey) weighted average cost of funding (WACF) has declined to 48.55%. We expect this to retreat further toward 47% in the coming days. While we do not anticipate a cut in the policy rate at next Thursday’s MPC meeting (June 19), we expect the upper bound of the interest rate corridor to be reduced from 49% to 47.5%. A cut in the policy rate may be on the table for the July meeting. This policy outlook is supportive, particularly for the XBANK Banking Index stocks, and subsequently for Borsa Istanbul as a whole. Should the CBRT provide messaging next week in line with the expected path, we may observe movements above the 10,000 level in the BIST 100 Index. The 100- and 200-day exponential moving averages, which converge around the 9,560 level, can now be monitored as a key support zone. Today’s agenda includes U.S. inflation data, with expectations pointing to an increase in annual CPI. Turkey’s 5-year CDS premium starts the day at 293 basis points. A sustained move below 300 basis points would be a positive signal.