Turkey Wake up call: Macro, Political and Equity News, 20th August

BIST jumped 2.95% yesterday as investors got excited after President Erdogan's statement that he will announce some good news on Friday, reportedly a major natural-gas discovery in the Black Sea. After an uptick open, BIST100 floated in the 1,100-1,105 range for most the day before staging a rally on Erdogan's statement after 4PM along with the strong rebound in lira. The move was driven by petrochemicals and energy stocks as well as the strength in BIMAS, EKGYO, SISE, ARCLK, FROTO, EREGL, and KCHOL as top gainers while TTRAK, CCOLA, HEKTS, GUBRF, and BAGFS stood out among the rare decliners. Today, our macro agenda highlight will be the monthly Monetary Policy Council meeting with the decision on policy rates due 2PM local time. There is a broad-based consensus (Bloomberg survey) that the CBT will keep its benchmark weekly repo rate unchanged at 8.25% while only a handful of economists predict a hike of between 75-175bps. BIST is headed for a negative start given the sour mood in global markets following the FED meeting minutes released last night presenting a downbeat outlook for the economy as well as on increasing worries about the spread of the coronavirus in Europe. Lira is weaker with USDTRY above the 7.30 mark vs around 7.26 at yesterday's closing bell. U.S. futures are down 0.6% in early trades on top of c.0.6% overnight losses after we left and Asian markets are all trading in the red.