Macro and politics

* The CBRT will release the results of the December Market Participants’ Expectations Survey today @ 10:00 local time. Following the inflation realizations for November surpassing expectations, we anticipate that in the December survey, participants' year-end CPI expectations for 2024 may rise slightly above 45%. We expect the annual CPI to conclude this year at 45.4%, with a reduction to 26% by the end of 2025. In addition to inflation expectations in the December survey, participants' predictions for the upcoming MPC meeting on Thursday, December 26, will also be closely monitored. Following dovish signals in the November MPC meeting, we anticipate a measured rate cut of 150bps in December."

*TURKSTAT will release December Consumer Confidence Index @ 10:00 local time. The Consumer Confidence Index dropped to 79.8 level from 80.6 as of November. As per the sub-categories of the November data, the index related to the financial situation of households at present decreased to 66.1 from 64.7, while the general economic situation expectation index over the next 12 months period edged down to 73.8 from 75.3. Moreover, the financial situation expectations of households over the next 12 months index retreated to 80.6 from 82.1. Lastly, the sub-index index related to the assessment on spending money on durable goods index over the next 12 months compared to the past 12 months period, which is an important leading indicator in terms of domestic demand, slid to 98.6 level from 100.1 level. Following the leading indicators signaling a moderate amelioration in domestic demand conditions in October, we observe that the initial data for November has turned negative again. The data available so far portrays a relatively stagnant picture of the domestic activity compared to the third quarter. 

* In the week of December 6 – 13, the equity market experienced a foreign inflow of USD318.7mn, while there was a net foreign outflow from the bond market at an amount of USD243mn (excluding the repo transactions). Moreover, the foreigners’ share in total bond stock rose to 7.6% from 7.5%. The residents’ FX deposits surged by USD1.6bn (gold accounts excluded, EUR/USD parity adjusted) in the period of December 6 – 13, while total FX deposits (including gold, price adjusted) climbed by USD1.4bn in the week of December 6 – 13. The CBRT’s gross FX reserves: USD163.6bn (up USD4.1bn compared to a week ago) Net international reserves increased by USD4.1bn to USD65.4bn, while net reserves excluding swaps climbed by USD1.7bn to USD50bn.