Daily Bulletin

Good morning. Despite expectations for a Fed rate cut on December 10 remaining intact, profit-taking from peak levels continues in U.S. and European markets. In Asia, the picture is more mixed, though the overall tone remains weak. In Borsa Istanbul, however, the index broke above the 11,000–11,050 resistance zone with yesterday’s 2% advance. The index closed the session at 11,116, supported primarily by the Istanbul Chamber of Commerce’s monthly retail price increase of just 1.19%—a figure that bolstered expectations for a potential rate cut from the Monetary Policy Committee ahead of tomorrow’s nationwide inflation release. From a technical standpoint, the breakout above a key resistance area, accompanied by rising volume and capital inflows, is constructive. In addition to moving averages, the improvement in momentum and trend indicators suggests that rate-cut-oriented scenarios for BIST may continue to gain traction. Yesterday, the top five contributors to the index’s upside were YKBNK, ASELS, AKBNK, TUPRS, and SAHOL. Over the past week, companies attracting steady inflows include ASTOR, ASELS, HALKB, SAHOL, TUPRS, DSTKF, MGROS, KTLEV, TMPOL, TOASO, KCHOL, and DOAS. We view the increase in the number of high-weight index constituents experiencing inflows as a positive sign for the breadth of market participation. On today’s agenda, employment and CPI data in Europe come into focus. Turkey’s five-year CDS starts the day at 237 bps. Here, we would note that TL-denominated assets are approaching their most constructive pricing zone since 2018, and that below 230 bps, the XBANK Banking Index could receive meaningful support from CDS levels in addition to MPC expectations.