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

BIST climbed 1.32% on Friday as foreign institutions seemed to have returned to the scene as buyers, carrying the weekly gains in the index to 1.81%. After an uptick start, benchmark BIST ascended almost uninterruptedly to close near its intraday high. Recovery in lira alongside EM currencies also supported the sentiment. Banks slightly outperformed with the 1.50% gain in their sector index with heavyweights GARAN and AKBNK taking the lead. PETKM, TTRAK, FROTO, KCHOL, ARCLK, EKGYO, MPARK, BRISA, and GOZDE led the non-bank gainers while ENKAI, SELEC, GUBRF, AKSA, NETAS, and DOHOL were among the rare decliners. Coming to start of the new week, our local macro agenda involves August'20 Balance of Payments data due at 10AM local time. Bloomberg survey puts the monthly CA deficit at USD4.40bn vs the USD3.34bn surplus recorded for the same month of 2019. Separately, unemployment statistics for July'20 will also be released at 10AM. Headline unemployment had climbed 0.5pp from a month ago to 13.4% in June while remaining a tad above the 13.0% level for the same month of 2019. Meanwhile, seasonally-adjusted employment had climbed 0.2pp on a sequential basis to 14.3%, the highest ever since the start of the series in 2005. We anticipate an uptick start for the BIST given continued supportive mood abroad while the small weakness in lira may create some headwinds (USDTRY at 7.8811 vs 7.8656 at Friday's closing bell). U.S. futures are up 0.3% in early trades and Asian markets outside of Japan are mostly trading in the green.