Turkey Wake-up call: Macro, Political and Equity News, 24th September

BIST gained 0.59% yesterday in tandem with the European peers and managed to shrug off the weakness in lira for the second day in a row. After an uptick start, BIST100 index gradually climbed to 1,106 and 1,110 levels before paring back a good part of its gains during the last hour. Banks outperformed with the 1.36% gain in their sector gauge. TCELL, KCHOL, TKFEN, ALARK, and Sisecam Group names topped the non-bank gainers while EREGL, PETKM, ALKIM, THYAO, and food retailers were among the weak spots. Today, our main macro agenda highlight will be the Monthly Monetary Policy Council meeting with the decision on policy rates due 2PM local time. There is 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 75-150bps. Separately, September'20 Manufacturing Capacity Utilization Rate (CUR stood at 73.3% in August'20 and was 76.3% back in September'19) and September'20 Real Sector Confidence index (was at a 6-month high of 106.2 in August'20 and had stood at 98.8 back in September'19) both to be released at 10AM local time. BIST is headed for a negative start given the sour mood in global markets while lira is flattish with USDTRY a tad above the 7.70 mark. U.S. futures are down 0.3% in early trades on top of their 1.9-2.1% overnight losses after we left and Asian equity benchmarks are all in the red.