Turkey Wake-up call: Macro, Political and Equity News, 3rd January

BIST slipped 0.32% on Friday after a day mostly spent in positive territory, carrying its weekly losses to 1.78%. Banking index lost 1.88% for the day with YKBNK and ISCTR underperforming peers. TAVHL, ENJSA, TTRAK, KORDS, MAVI, VESTL, and KRVGD topped the non-bank gainers while TOASO, HEKTS, EKGYO, GUBRF, TCELL, ENKAI, and TTKOM were among the weak spots. Coming to the first trading of the new year, our local macro agenda highlight will be the December'21 inflation numbers due at 10AM local time. Bloomberg consensus CPI at +8.50% (yearly 27.36% vs 21.31% a month ago) and PPI at +11.25% (yearly 68.10% vs 54.62% a month ago). Meanwhile, consumer prices in metropolitan Istanbul jumped 9.65% in December (vs +1.36% same month of 2020) according to the Cost-of-Living Index compiled by the city's Chamber of Commerce, boosting the annual inflation to 34.18% from previous month's 24.05%. Separately, December'21 PMI will also be announced at 10AM. The index had climbed 1.6% on a sequential basis to 52.0 in November and had stayed in expansion territory for the sixth consecutive month after the loosening of pandemic restrictions. We anticipate a downtick open for the BIST as the significant hikes in electricity and natural gas tariffs may weigh on industrial stocks. Lira is trading softer with the USDTRY above the 13.75 mark in early trades vs 13.2891 at Friday's closing bell. Global stock markets present a mixed picture.