Macro and Politics

* August Employment figures will be released @ 10:00 local time. The adjusted unemployment rate declined to 8% in July from 8.4%. As per the composite measure of labor underutilization – including time related underemployment, potential labor force and unemployment – eased to 29.6% from 32.7%, though remaining elevated. Moreover, Within the components, the combined rate of time-related underemployment and unemployment fell to 19.1% from 22.8%, while the combined rate of unemployment and potential labor supply edged down slightly to 19.9% from 20.2%. The persistently elevated level of labor underutilization points to a weaker labor market than headline data suggest. Sustained high levels of time-related underemployment and potential labor supply indicate that overall labor underutilization is likely to remain elevated in the coming period.

* TURKSTAT will release August foreign trade figures 10:00 local time. Preliminary foreign trade data released by the Ministry of Trade point to a palpable narrowing in the deficit in August. According to the preliminary figures, exports contracted by 0.9% y/y to USD21.8bn, while imports declined by 3.9% y/y to USD26bn. Accordingly, the foreign trade deficit narrowed from USD6.4bn in July to USD4.2bn in August, while on an annual basis, the cumulative trade deficit eased from USD88.3bn to USD87.4bn. Based on the preliminary trade data, we estimate that the balance of payments–defined trade deficit declined from USD4.6bn to USD2.2bn in August, paving the way for a current account surplus in excess of USD5bn.

*The Treasury will release its next three-month (October – December 25’) domestic borrowing strategy today @ 17:30 local time. According to the previous program (September – November 25’), the Treasury has a domestic redemption of TL263.5bn in October, while in return plans to borrow TL350.7bn throughout the month.

* The Economic Confidence Index edged up by a mere 0.1% in September to 98, remaining below the 100 – threshold. Having lingered under this benchmark since March, the index continues to reflect a predominantly pessimistic perception of the overall economic outlook. A breakdown of the September sub-indices presents a mixed picture: the Consumer Confidence Index fell by 0.4% to 83.9, while the Real Sector Confidence Index inched up by 0.2% to 100.8. The Services Confidence Index eased by 0.1% to 111.0, the Retail Trade Confidence Index gained 0.4% to 109.2, whereas the Construction Confidence Index recorded a notable 3.6% increase to 88.3.