Turkey Wake-up call: Macro, Political and Equity News, 22nd October

BIST edged up 0.09% yesterday as earlier gains evaporated during the afternoon hours. Benchmark BIST100 index opened gap higher and touched 1,222 in early trades, but could not sustain its gains amid rounds of selling in the after 2PM. Banks fared better with their 0.54% average gain as TSKB and VAKBN outperformed peers. EREGL, FROTO, MGROS, ISMEN, AKSA, ISMDR, and MPARK led the non-bank gainers while TCELL, DOAS, AEFES, MAVI, TKFEN, ENKAI, and TOASO fell behind. Today, eyes will be on the monthly Monetary Policy Council meeting with the decision on policy rates due after 2PM local time. Following last month's surprise move, the consensus (Bloomberg survey) forecast is that the CBT will raise its benchmark weekly repo rate by 175bps from the current 10.25% with the participants predicting a hike of between 0-300bps. Separately, October'20 Consumer Confidence Index compiled by TurkStat is due 10AM. In the revised series, the index had climbed 3.2% on a sequential basis to 82.0 in September following declines in the previous two months. We predict a slightly lower open for the BIST as the mood in peer markets has soured on reported attempts of influence by Russia and Iran in upcoming U.S. elections. U.S. futures are down c.0.5% in early trades on top of the 0.3-0.4% overnight losses after the time we closed and Asian markets are mostly trading in the red.