Daily Bulletin

Good morning. At Borsa Istanbul, the market sought balance around 11,300 yesterday; however, following the announcement around 15:30 regarding the annulment of the CHP Istanbul Provincial Congress held on October 8, 2023—along with the dismissal of the management, annulment of all decisions taken at the congress, and the appointment of an interim administration—the BIST 100 index fell to as low as 10,600 before rebounding to close the day at 11,877 points. In addition to equity market selling, yields on domestic bonds, treasuries, and eurobonds rose, while Turkey’s 5-year CDS spread climbed above 270 basis points. Markets are likely to pay closer attention to potential scenarios such as absolute nullity or court-appointed trustees in connection with the annulment lawsuit regarding the CHP’s 38th Ordinary Congress, which was scheduled for September 15. As a result, until the court’s decision, Borsa Istanbul may display increased fragility, with a tendency to react more strongly to negative developments while pricing in positive news more moderately. The fact that the Turkish lira did not experience a significant depreciation following yesterday’s developments is positive, though this needs to be monitored carefully alongside reserve data. Looking at this morning, global risk appetite is balanced, but the overall outlook has weakened since last night. In the U.S., markets are awaiting the federal appeals court ruling on customs tariffs, while in Europe, weak growth and the lack of progress in negotiations with Russia remain sources of pressure. On today’s agenda, domestic inflation data take center stage, with annual CPI expected to decline from 33.5% to around 32.5%. Abroad, Eurozone PMI and PPI data will be monitored, alongside U.S. factory orders and durable goods orders.