Turkey Wake up call: Macro, Political and Equity News, 1st July

BIST added 0.59% yesterday as the weakness in banks was balanced out by the strength in some key non-financials. After an uptick open in sync with global peers, BIST100 spent the entire day in positive territory. The index moved up to 117k levels late in the day but some closing-session sell tickets trimmed some of the gains. Banks lost 0.59% on average in reversal of some of the previous day's rally. TCELL, TUPRS, OTKAR, AGHOL, ENKAI, and GUBRF were among the rare non-bank decliners while EKGYO, TOASO, ARCLK, KRDMD, ENJSA, PGSUS, ULKER, and KOZAL topped the gainers. Today, our local macro agenda showcases June'20 PMI that will be announced at 10AM local time. The index had jumped 22.5% on a sequential basis from 33.4 in April - the lowest since the global financial crisis - to 40.9 in May, suggesting that the sector is on the road to recovery after the sharp slowdown due to the pandemic. Separately, Istanbul Chamber of Commerce will reveal its June'20 inflation numbers for metropolitan Istanbul at noon local time. We foresee a sideways start with a negative bias for the BIST given the global market concerns over the coronavirus spread and rising U.S.-China tensions. U.S. futures are down 0.5% in early trades in reversal of their 0.5-0.6% overnight gains after when we left while Asian markets are trading mixed.