Daily Bulletin

Good morning. While global markets continue to price in Fed rate-cut expectations, overall optimism remains intact. US and European futures are trading higher this morning, and Asian equities are broadly positive as well, with the exception of Japan, where rate-hike expectations continue to weigh on sentiment. Borsa Istanbul closed yesterday with a 1.07% decline. The top five contributors to the index were TRALT, EFOR, BRSAN, TAVHL and PASEU, while companies attracting steady inflows over the past week included TUPRS, VAKBN, TCELL, ASTOR, BRSAN, TAVHL, BERA, ASELS and ENKAI. Despite ongoing expectations for lower inflation and subsequent rate cuts from the CBRT, concerns and speculation related to non-economic developments continue to exert pressure on the market. With the index slipping below 11,000, the 10,700–10,800 band stands as the key support area, while any rebound is likely to encounter resistance at the 11,000–11,100 range. Today’s agenda includes growth data from Europe and core PCE from the US. However, we do not expect US data to materially shift Fed-related expectations at this stage, and we anticipate market pricing to maintain expectations for a 25 bps rate cut at next week’s meeting. Turkey’s five-year CDS opens the day at 233 bps. Notably, TL assets have entered their most constructive pricing zone since 2018, and we would highlight that below 230 bps, the XBANK Banking Index could receive meaningful support not only from monetary policy expectations but also from CDS dynamics.