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

BIST retreated 0.71% on Friday after a day almost totally spent in the negative territory, trimming its weekly gains to 1.39%. Banks lost 0.55% on average with ISCTR underperforming peers. HEKTS, BRISA, DOAS, ODAS, VESTL, and GLYHO led the non-bank gainers while ENKAI, SAHOL, BIMAS, EREGL, TOASO, and DEVA topped the decliners. Today, our local macro agenda involves Central Bank's August'21 real effective FX rate due at 2:30PM local time. The CPI-based index is expected to rebound for the second month from its all-time-low of 59.65 in June given ~1.9% appreciation of lira vs the currency basket during the month along with the 1.12% headline CPI print for August. Separately, Treasury will issue 2-year TLREF-indexed bonds in its single domestic borrowing auction today. Will hold two more auctions tomorrow ahead of this Wednesday's TL0.60bn small redemption while we note there had been no auctions last week during which the Treasury redeemed some TL1.81bn of domestic debt instruments. BIST seems headed for a sideways start as the slight weakness in lira (USDTRY at 8.32 levels vs 8.3040 at Friday's closing bell) should be balanced out by the upbeat sentiment in Asian bourses while the U.S. markets are closed for a holiday.