Turkey Wake-up call: Macro, Political and Equity News, 19th November

BIST jumped 2.78% yesterday in a move led by banks amid optimism about today's pivotal MPC meeting today. After an uptick start that marked the lowest point of the day, BIST100 turned north and gradually climbed to 1,290 level just before 3PM. President Erdogan's remarks about the interest rates during his speech to businesspeople led to a short-lived retreat, but the market soon gained a fresh traction to climb further and close at its intraday peak. Banks outperformed with the 5.05% surge in their sector index. Steelmakers, SAHOL, KCHOL, DOAS, PETKM, EKGYO, and CCOLA topped the non-bank gainers for the day while FROTO, SOKM, MGROS, and foodstuff producers were among the rare decliners. Today, investors will be holding their breath for the monthly Monetary Policy Council meeting with the decision on policy rates due shortly after 2PM local time. Consensus (Bloomberg survey) calls for a median 475bps hike in the benchmark weekly repo rate to 15.00% while there is a very wide range of expectations that are scattered between 150 and 575bps for the first meeting to be chaired by new Central Bank governor Naci Agbal. We foresee a downtick open for the BIST given the 1.3-1.5% overnight losses in main American indices after we left while Asian markets are moving in different directions. Lira is a tad weaker with USDTRY pair at around 7.7150 vs 7.7048 at yesterday's closing bell.