Daily Bulletin

Good morning. Global markets are starting the week with optimism stemming from former President Trump's announcement of a tariff agreement between the U.S. and the EU, which sets duties at 15%. U.S. and European futures are trading slightly higher, supported by the fact that the deal averts higher tariffs that were scheduled to take effect on August 1, thereby reinforcing global risk appetite. In contrast, profit-taking is prominent in Asia. The Nikkei Index is down 0.7%, while the Shanghai Stock Exchange is trading flat. This week's primary focus will be on the interest rate decisions from the U.S. Federal Reserve on Wednesday and the Bank of Japan on Thursday. Both central banks are expected to keep rates unchanged; however, their forward guidance will be critical in shaping expectations for the remainder of the year. Domestically, market participants monitored ratings updates from two major credit rating agencies over the weekend. Moody’s delivered a surprise upgrade to Turkey’s credit rating, raising it from ‘B1’ to ‘Ba3’. Fitch, on the other hand, affirmed its rating at ‘BB’ with a ‘Stable’ outlook. Although Ba3 remains in the non-investment grade category, it represents the highest tier within the speculative segment. However, the revision of the outlook from ‘Positive’ to ‘Stable’ limits the potential for another near-term upgrade. Last week, a loss of momentum accompanied capital outflows from Borsa Istanbul, with the BIST 100 Index closing the week at 10,642 points. As the new week begins, we will be watching the possibility of the index testing the 10,700 resistance level and above, partly supported by Moody’s upgrade. In the short term, the 10,800–11,000 range is seen as resistance, while the 10,500–10,300 band remains the key support area. The main trend support continues to stand in the 9,800–10,000 range. From a long-term valuation perspective, the 13,900–14,000 point range remains the target for the index. This week, domestic markets will also be watching second-quarter earnings reports. Weak expectations regarding corporate profitability are one of the main reasons behind the recent loss in momentum. Today’s data calendar is quiet. Later in the week, the key data points will include monetary policy decisions from the U.S. and Japanese central banks, Germany’s preliminary CPI, U.S. PCE inflation on Friday, and Eurozone CPI. Turkey’s 5-year CDS premium starts the week at 279 basis points.