Macro and politics

*The Treasury will hold 3y CPI-indexed and 6y FRN auctions bond auctions today. The Treasury borrowed a total of TL78bn from domestic markets yesterday, including non-competitive sales, via its 6m G-bond auction. The average cost of borrowing was 43.97%, with the bid-to-cover ratio standing high at 2.8x. With yesterday’s 6m G-bond auction, the total domestic borrowing of the Treasury in January has reached TL214bn. After today’s 3y CPI-indexed and 6y FRN auctions, the Treasury will hold the direct sales of 1y gold-denominated bond & 1y gold-denominated lease certificate on Friday, January 24^th, and finalize its domestic borrowing program for January. According to three-month (Jan – Mar 25) domestic borrowing strategy, the Treasury has a total domestic redemption of TL225.4bn in January, while in return plans to borrow TL293.8bn throughout the month, indicating a roll-over ratio of 130%.

* TURKSTAT will release December home sales figures @ 10:00 local time. In November, housing sales totaled 153,014 units, reflecting a significant 63.6% annual increase, but a 7.3% decrease compared to the previous month. Mortgaged home sales reached 21,804 units, showing a 3.4% monthly increase and an impressive 315.7% rise y/y. The share of mortgaged sales in total housing sales rose from 12.8% in November 2023 to 14.2% in November 2024. The average mortgage rate, which was 42.15% in November 2023, saw a slight decline to 41.24% in November 2024, marking a no palpable change. Despite persistently high mortgage rates, the noticeable annual rise in mortgage-backed sales can be attributed to expectations of future price increases, following a period of real declines in housing prices. Turning to the details of the November data: Sales to foreign buyers decreased by 8.2% y/y to 2,151 units, while the share of foreign sales in total housing sales increased slightly from 1.3% to 1.4%.