Macro and Politics

* The Treasury will hold the direct sales of 1y USD-denominated bond & 1y USD-denominated lease certificate today, finalizing its domestic borrowing program for August. According to its three-month (August – October 2025) domestic borrowing program, the Treasury faces a hefty domestic redemption of TL339bn in August, while in return it plans to borrow TL440.8bn in total throughout the month, indicating a roll-over ratio of 130%. Hence, having already raised a total of TL306.5bn through domestic borrowing since the beginning of the month, the Treasury is expected to borrow around TL135bn via today’s double direct sales.

*TURKSTAT will release August Consumer Confidence Index @ 10:00 local time. The consumer confidence index dropped from 85.1 to 83.5 level in July, indicating the lowest level since February. It is important to underscore that the consumer confidence index — which ranges from 0 to 200 — signals pessimism when it falls below 100, and optimism when it exceeds that threshold. A breakdown of the July consumer confidence index reveals the following: The sub-index reflecting the financial situation of household at present decreased from 69.3 to 68.2, while the sub-index measuring financial situation expectation of household over the next 12 months eased from 85.8 to 84.6. Moreover, general economic situation expectation over the next 12 months decreased from 82.4 to 79 and finally, the sub-index tracking assessment on spending money on durable goods over the next 12 months — a key indicator of domestic demand — edged down from 102.6 to 102.3 level in July.

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the period of August 8 – 15 @ 14:30 local time. Based on our calculations using the CBT’s analytical balance sheet, we estimate that during the week of August 8 – 15, net international reserves surged by USD2.5bn to USD70bn, while gross FX reserves climbed by USD2.3bn to USD176.8bn. Accordingly, our calculations point to gross foreign exchange reserves reaching an all-time high. We expect today’s official figures to confirm a strong rebound, in line with our projections. To recall the CBT data from previous week: During the week of 1–8 August, foreigners registered a limited net inflow of USD78mn into the equity market, while recording USD417mn in net sales in the bond market (excluding repo transactions). Meanwhile, their share in the total bond stock stood at 6.4% during the same week. Moreover, the residents’ total FX deposits (including gold, price adjusted) surged by USD1.5bn during the week of 1 – 8 August. As per the CBT’s reserves, gross FX reserves climbed by USD5.4bn to USD174.5bn and net international reserves rose by USD4.4bn to USD67.5bn, while net reserves excluding swaps increased by USD5.9bn to USD49.7bn.