Macro and Politics

* TURKSTAT will release October Economic Confidence Index @ 10:00 local time. 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.

* The CBT will release the October Sectoral Inflation Expectations survey @ 10:00 local time. According to the results of the September Sectoral Inflation Expectations Survey, 12-month ahead inflation expectations fell by 0.6pp to 22.3% for market participants, by 0.9pp to 36.8% for the real sector and by 1.1pp to 53% for households. Following the higher-than-expected CPI print for September, the October Market Participants Survey revealed a notable upward revision in inflation expectations. Accordingly, market participants’ year-end 2025 CPI forecast rose from 29.86% to 31.77%. In addition, the 12-month ahead CPI expectation increased from 22.25% to 23.26%, while the 24-month ahead expectation climbed from 16.78% to 17.36%. We expect the deterioration observed in market participants’ inflation expectations to also be reflected in the upcoming Sectoral Inflation Expectations Survey for October, indicating that the upward drift in expectations has likely extended to both the real sector and households.

* The CBT will release weekly international reserves for the period of October 17 – 24 @ 14:30 local time. Based on our calculations using the CBT’s analytical balance sheet, we estimate that during the week of October 17 – 24, gross FX reserves slid notably by USD13bn to USD185.5bn. Meanwhile, we estimate that the CBT’s net FX position fell by USD11.3bn over the same period. We anticipate that today’s official reserve data will likely reflect a similar drop in reserves in line with our estimates. Please recall that the weekly foreign portfolio flows and money & banking statistics, typically released alongside the reserves data in every Thursday, will be published at 14:30 local time on Monday, 3 November, Due to the Republic Day holiday.