Turkey Wake up call: Macro, Political and Equity News, 12th June

BIST slipped 0.57% yesterday amid the risk-off sentiment in global markets, but Turkish stocks demonstrated some resilience thanks to selective foreign inflows in a bunch of blue-chips. After a downtick open, BIST100 gradually recovered and climbed to 110.2k levels around mid-day. However, further pressure on global peers in the afternoon erased the gains and pushed the index to a negative close. Banks lost 0.73% on average as YKBNK, AKBNK and VAKBN underperformed while TSKB caught some bids. PETKM, DOAS, SOKM, BIZIM, OTKAR, TATGD, GLYHO, and KORDS topped the gainers among non-financials while BIMAS, TUPRS, TAVHL, ARCLK, PGSUS, VESTL, and KCHOL stood out as weak spots for the day. Today, our macro agenda is packed starting with April'20 Balance of Payments data due 10AM local time. Bloomberg survey puts the monthly CA deficit at USD4.40bn vs the USD0.47bn deficit recorded for the same month of 2019. April'20 Industrial Production numbers are also due at 10AM. Bloomberg consensus -23.3% yoy based on the estimates for calendar-adjusted series and -10.5% mom based on the seasonally & calendar-adjusted series. Lastly, April'20 Retail Sales Volume index compiled by TurkStat is also due at the same time. Adjusted for seasonal and working day effects, index had plunged 8.1% on a sequential basis an 11-month low of 114.6 in March from its all-time high a month ago as the pandemic had started to weigh on retail activity. BIST is off to a negative start given the overnight sell-off in U.S. markets (major indices down 2.8-3.1% after we closed) and some slide in lira (USDTRY 6.8374 vs 6.8300 at yesterday's closing bell). Asian markets are all trading lower, but off their earlier lows, and U.S. futures are up c.1.2% in morning trades.