Daily Bulletin

Good morning. Expectations of a Fed rate cut continue to support global equity markets. The impact has been so strong recently that, despite the Bayrou Government in France losing a confidence vote for the first time in 67 years at the ruling party’s own request, the EUR/USD pair moved toward 1.1770 while gold prices advanced above USD 3,650 per ounce. Meanwhile, the decline in U.S. Treasury yields continues. Domestically, ongoing political tensions keep pressure on Turkish assets. The FX market remains calm, but bond yields continue to rise while the BIST is trending lower. Yesterday, we noted that below the 10,600 support level, there was room for a pullback toward 10,300. Given the continued decline fueled by capital outflows and foreign selling, the psychological support level of 10,000 has now also come onto the radar. The 10,600 level should now be monitored as resistance. We also observe that 12-month long-term target levels for the BIST 100 index are beginning to be revised slightly downward. We believe these revisions stem less from political developments and more from expectations that the CBRT’s anticipated rate-cutting path will be tempered, and we expect this trend to continue for some time. Today’s calendar is quiet. Turkey’s 5-year CDS premiums start the day at 273 basis points.