Daily Macro News

* The CBT will release July Real Effective Exchange Rate (REER) today @14:30 local time. Our calculations based on the average equally weighted currency basket in July, the monthly inflation print, and a weighted geometric external price index constructed using our model-based estimates for July inflation across Turkey's major trading partners, point to a rise in the CPI-based real effective exchange rate...
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* TURKSTAT will release July inflation figures today @ 10:00 local time. We expect monthly CPI to increase by 1.8% in July. Market expectations are also centered around 1.8%–1.9%, broadly in line with our forecast. A monthly print in line with our estimate would bring annual CPI inflation down only marginally, to 31.8% from 32.1%. We estimate that the increase in outpatient co-payments at both public and private...
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* TURKSTAT will release June foreign trade figures @ 10:00 local time. The preliminary June trade figures released by the Ministry of Trade point to a marked widening in the foreign trade deficit compared to the previous month. According to the preliminary data, exports rose by 21.9% y/y to USD24.9bn, while imports increased by 23.1% y/y to USD35.3bn. As a result, the monthly trade deficit widened to USD10.4bn in...
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* June Employment figures will be released @ 10:00 local time. The seasonally adjusted unemployment rate remained unchanged at 8.2% in May, while the broad underutilization rate — which we closely monitor as a more comprehensive gauge of labor market conditions, and which includes time-related underemployment, potential labor force and unemployment — increased from 30.1% to 31.0% over the same period. A breakdown...
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* Based on our calculations using the CBT's analytical balance sheet, we estimate that the CBT's net FX reserves increased by USD293mn to USD51.4bn in the week of July 17–24, while gross FX reserves rose by USD2.3bn to USD162.8bn. We expect the official reserve data, scheduled to be released by the CBT on Thursday at 14:30 local time, to confirm a reserve build broadly consistent with our analytical...
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* According to the July Sectoral Inflation Expectations (SIE) Survey, 12-month-ahead annual inflation expectations increased modestly among market participants, rising by 0.14pp to 23.95%. In contrast, expectations continued to ease across the real sector and households, declining by 0.60pp to 32.5% and by 1.19pp to 44.94%, respectively. Meanwhile, the share of households expecting inflation to decline over the...
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* The CBT will release the July Sectoral Inflation Expectations (SIE) Survey @ 10:00 local time. According to the June Sectoral Inflation Expectations (SIE) Survey, 12-month-ahead annual inflation expectations edged down by 0.01pp to 23.81% among market participants, while remaining unchanged at 33.1% for the real sector. Household inflation expectations, meanwhile, declined more noticeably, falling by 3.38pp to...
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*The Monetary Policy Committee (MPC) decision will be announced today at 14:00 local time. Our base case remains that, following today’s MPC meeting, the CBT will gradually resume weekly repo auctions, although we believe uncertainty surrounding the timing of this step has increased in recent weeks. Renewed tensions between the US and Iran have heightened upside risks to the inflation outlook through higher oil...
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