Daily Bulletin

Good morning. In the U.S., CPI data exceeded expectations, while underlying components of the core personal consumption expenditures (PCE) index — the Fed’s preferred measure of inflation — also showed notable increases. As a result, market pricing for a potential first rate cut by the Fed in October has diminished. However, political pressure from President Trump on Fed Chair Powell continues to intensify. This backdrop increases uncertainty and raises the risk of a shift toward irrational monetary policy, triggering sell-offs in global equities, particularly in U.S. markets. This morning, U.S. and European equity futures are trading in negative territory, while Asian markets are showing mixed performance. On Borsa Istanbul, we observed a 1.3% decline on Monday along with significant outflows based on institutional trading activity. The weakness in momentum may persist, influenced by the global market outlook. On the BIST 100 index, support levels are seen at 10,120 and the 9,800–10,000 range, while the first resistance zone stands at 10,350–10,450. Market participants continue to expect rate cuts from the CBRT’s Monetary Policy Committee (MPC), which may limit the downside potential in BIST. However, any upward movement will likely be deferred until after the MPC decision. Therefore, we expect a period of range-bound and tight trading activity. On today’s domestic agenda, the focus will be on the central government budget balance. After recording a surplus of TRY 235.2 billion in May, the budget is expected to return to a deficit in June. For full-year 2025, we project a budget deficit of TRY 1.9 trillion, approximately 3% of GDP. Externally, attention will be on the U.S. PPI data. Turkey’s 5-year CDS premiums opened the day at 288 basis points.