Daily Bulletin

Good morning. Stronger-than-expected growth data in the U.S. has reduced expectations of a Fed rate cut, leading to selling pressure on Wall Street. However, we observed some buying from intraday lows. Today, the core Personal Consumption Expenditures (core PCE) data to be released at 15:30 in the U.S. will be critical. A figure above expectations would be priced negatively, while one below expectations would be priced positively. When looking at the meeting between President Erdoğan and U.S. President Trump in Washington, considering all its subtopics and main themes, it appears neutral for Turkish assets in the short term, and potentially positive in the medium to long term depending on developments. The termination of CAATSA sanctions, Turkey’s return to the F-35 program, modernization of the F-16 fleet, and positive news flow on cooperation in energy, aviation and defense sectors are expected to support Turkish assets going forward. In the near term, for the BIST 100 index, the 11,500 / 11,600 band is viewed as resistance and the 11,250 / 11,350 band as support. In terms of long-term valuations, the BIST 100 index still points to a 12-month target level of around 15,000, implying approximately 30% upside at the index level and around 50% upside potential on average for “index-outperforming” companies. These figures are above expected inflation and potential net deposit returns and remain attractive for domestic investors. Considering exchange rate expectations, we also see attractive potential in U.S. dollar terms for foreign investors in Borsa Istanbul, which supports our view that foreign interest will continue. Apart from the U.S. inflation data, today’s agenda is relatively calm. Turkey’s 5-year CDS started the day at 260 basis points.