Turkey Wake-up call: Macro, Political and Equity News, 15th April

BIST jumped 2.24% yesterday as buyers seem to have returned to the scene after recent pull-back. After an uptick start, BIST100 index climbed to 1,395 level in early trades and then onto the 1,400-1,405 range where it spent most of the day. Another wave of buying in the last 40 minutes pushed the index to close at its daily peak. Banks outperformed for the third consecutive day and gained 3.57% on average. TUPRS, EREGL, KOZAL, EKGYO, ARCLK, SAHOL, GUBRF, and SASA topped the non-bank gainers while FROTO, OTKAR, SOKM, BIMAS, ULKER, and CCOLA were among the rare decliners. Today, our key macro item will be the monthly Monetary Policy Council meeting with the decision on policy rates due 2PM local time. Almost all of the participants in the Bloomberg survey expect the MPC to keep its benchmark weekly repo rate unchanged 19.00% in this first meeting to be headed by new Central Bank governor Sahap Kavcioglu while only one economist predicts a 50bps cut and another foresees a 200bps reduction. Separately, TurkStat will release the residential sales data for March’21 at 10AM local time. Home sales had dropped 31.6% yoy to 81k units in February as the summer frenzy on favorable mortgage rates continued to fade away amid rising interest rates that led to a 66.5% yoy decline in mortgage-backed transactions. Lastly, March'21 central government budget numbers are due at 11AM. BIST seems off to a flattish start as investors await the MPC decisions locally and in absence of major triggers in either direction in international markets. Lira is almost unchanged with USDTRY pair around the 8.09 mark. U.S. futures are up 0.2% in partial recovery of the c.0.5% overnight losses after we left while Asian indices present a mixed picture.