Turkey Wake-up call: Macro, Political and Equity News, 7th June

BIST climbed 1.80% yesterday, resuming its recent uptrend after a one-day breather. It was a broad-base move with 85 gainers vs 12 decliners among the BIST100 constituents, but banks - led by the rally in GARAN - outshined their industrial peers with the 4.00% jump in their sector index. SISE, TUPRS, PGSUS, DOHOL, ODAS, OYAKC, TKNSA, and SELEC topped the non-bank gainers for the day while THYAO, HEKTS, KORDS, AKSEN, OTKAR, AKSA, and BRISA were among the handful of decliners. Today, our local macro agenda involves the Treasury's cash budget balance for May'22 to be disclosed at 5:30PM local time. Separately, Treasury will reissue 10-year fixed-coupon bonds and 6-year FRNs in its double domestic borrowing actions. Domestic redemption for the week totals TL2.61bn while the Treasury has raised TL5.25bn in yesterday's auction. We anticipate a slight negative open for the BIST given the weaker sentiment in global markets. U.S. futures are down c.0.7% in early trades on top of the 0.9-1.0% overnight losses in key indices after the hour we left and Asian equity indices are mostly trading in the red. Lira remains weak with the USDTRY pair testing the 16.65 mark vs 16.5950 at yesterday's closing bell.