Macro and Politics

*TURKSTAT will release April foreign trade figures 10:00 local time. Preliminary data released by the Ministry of Trade indicate a significant widening in the foreign trade deficit in April. According to the preliminary figures, exports rose by 8.5% y/y to USD20.9bn, while imports increased by 12.9%, reaching USD33bn. As a result, the foreign trade deficit widened markedly to USD12bn from USD7.2bn to, reflecting a substantial 21.7% annual surge.

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the period of May 16 – 23 @ 14:30 local time. Based on our calculations using the CBT’s analytical balance sheet, we estimate that during the week of May 16–23, net international reserves increased by USD8.1bn to USD48.1bn, while gross FX reserves rose by USD7.4bn to USD153.2bn. Accordingly, we forecast that the cumulative increase over the past three weeks reached USD15.3bn in net international reserves and USD14.5bn in gross FX reserves. We anticipate that today’s official reserve data will likely reflect a similar picture in line with our calculations. To recall the data from the previous week: During the period of May 9 – 16, the equity and the bond market (excluding repo transactions) experienced a net foreign inflow of USD245.2mn and USD1.9bn, respectively. Moreover, within the mentioned week, the residents’ FX deposits rose by USD544mn (excluding gold accounts and adjusted for the EUR/USD parity effect), while their total FX deposits (including gold, price adjusted) increased by USD865mn during the week of May 9 – 16. Besides, the CBT’s net international reserves increased by USD2.4bn to USD40bn, while gross FX reserves rose by USD1.3bn to USD145.8bn. Lastly, net reserves excluding swaps climbed by USD5.3bn to USD23.4bn.

*The Economic Confidence Index remained virtually unchanged in May, inching up by just 0.1 points from 96.6 to 96.7. As per the sub-components of May data: The consumer confidence index rose by 1.1% on a monthly basis to 84.8, while the real sector confidence index declined by 2.2% to 98.6. Moreover, the services confidence index climbed 0.9% to 110.5, the retail trade confidence index increased by 0.6% to 111.2, and the construction confidence index recorded a notable gain of 3.9%, reaching 88.4.