Daily Bulletin

Good morning. Iran has now targeted a U.S. military base in Bahrain, yet oil prices have shown little meaningful reaction to the development. Looking at equity markets, expectations for the next Fed rate hike have been pushed back by one meeting following the latest U.S. economic data, while post-earnings buying in technology stocks is supporting broader equity markets. U.S. indices gained strongly yesterday, rising between 1.2% and 2.8%, and futures are trading firmly higher again this morning. European futures and most Asian markets are also in positive territory. In contrast, weak momentum continues to weigh on Borsa Istanbul. After falling another 1.6% yesterday to close at 13,292, the BIST 100 approached the 13,000–13,200 support and short-term target zone that we previously highlighted. The index may open broadly in line with global markets this morning. However, for the ongoing downtrend to be challenged, the index needs to reclaim the 13,400–13,500 range. That said, several factors are likely to limit the potential for a meaningful rebound despite the supportive global backdrop: (i) continued weakness in market momentum, (ii) potential selling pressure from the unwinding of arbitrage positions as today marks the final trading day of July, (iii) increasing appreciation of the Japanese yen, raising the risk of carry trade unwinding, and (iv) the possibility of a U.S. military strike against Iran over the weekend. Yesterday, the biggest positive contributors to the index were ASTOR, PASEU, TRALT, AEFES, and SASA, while ASELS, ODINE, TUPRS, AKBNK, and THYAO weighed most heavily on performance. Over the past week, TCELL, ENJSA, TKFEN, KRDMD, ANHYT, and ANSGR have stood out with consistent fund inflows. On today's economic calendar, investors will monitor Turkey's foreign trade data and inflation figures from Europe. Turkey's five-year CDS spread begins the day at 239 basis points.