Turkey Wake up call: Macro, Political and Equity News, 6th July

BIST lost 0.99% on Friday in profit-taking, but still ended the week with cumulative gains of 0.94%. After an uptick start that marked the highest point of the day on Friday, BIST100 index mostly floated in slight positive territory during the morning hours. Sellers started to take control after 3PM, pushing the index down to 115.5k levels from where it staged a partial rebound during the lst 45 minutes. Banks lost 1.61% on average amid pressure on VAKBN, YKBNK, and ISCTR. THYAO, FROTO, EREGL, KRDMD, SISE, ARCLK, TAVHL, PETKM, and EGEEN stood out as the weakest non-financials while retailers, TTRAK, OYAKC, LOGO, MGROS, and MAVI topped the gainers. Today, our local macro agenda showcases Central Bank's June'20 real effective FX rate due at 2:30PM local time. The CPI-based index may see some rebound from its 20-month low of 68.60 mark for the previous month given ~1.2% depreciation of lira vs the currency basket that mostly matched the 1.13% headline CPI print for June. Separately, the Treasury will reissue 2-year fixed-coupon bonds and 7-year FRNs in double domestic borrowing auctions today. Will hold two more auctions tomorrow ahead of this week's hefty TL16.47bn redemption. We foresee an uptick open for the BIST given the positive sentiment in global equity markets this morning. U.S. futures are up almost 1.3% in early trades while all Asian markets are all trading in the green with gains in Chinese benchmarks topping 5%.