Turkey Wake-up call: Macro, Political and Equity News, 04th January

BIST closed 0.22% lower on the last trading day of the year that saw annual gains of 29.1% in the main index. Benchmark BIST100 opened on an uptick but spent the bulk of the day in the negative territory last Thursday before staging a rebound after 5:30PM. However, closing session sell orders erased the gains and pushed the index to a small negative close. Banks were a tad better with the 0.06% loss in the sector index. MGROS, TTRAK, ISGYO, YATAS, INDES, and CLEBI stood out as top gainers while EREGL, BIMAS, PETKM, OTKAR, HEKTS and SELEC were among the weak spots for the day. Coming to this morning, our local macro agenda highlight will be the December'20 inflation numbers due at 10AM local time. Bloomberg consensus CPI at +0.90% (annual 14.20%). Meanwhile, consumer prices in metropolitan Istanbul climbed 1.36% in December (vs +1.07% same month last year) according to the Cost of Living Index compiled by the city's Chamber of Commerce, expanding the annual inflation to 14.40% from previous month's 14.07%. Separately, December'20 PMI will also be announced at 10AM. The index had retreated 4.6% on a sequential basis to a 6-month low of 51.4 in November, but had remained above the 50 neutral line for the sixth consecutive month. Lastly, Treasury will reissue 2-year and 5-year fixed-coupon bonds in double domestic borrowing auctions today. Will hold two more auctions tomorrow ahead of this week's hefty TL21.14bn redemption. BIST is off to a slight positive open as the global markets are starting out the new year with a strong risk appetite. U.S. futures are down a few points, but holding onto bulk of the 0.6-0.7% overnight gains after we left last Thursday and Asian markets outside of Japan are mostly trading in the green. Lira is also strong with the USDTRY pair below the 7.37 mark vs 7.4275 at the time of last BIST closing.