Cliffhanger weeks
CHP’s Ekrem Imamoglu is sitting on the mayor’s throne, but not resting easy or on his laurels -- yet. Appeals by AKP-MHP should be ruled upon by the High Election Council by the end of the next week. AKP-MHP’s reasons for repeal are not convincing, but it will be the President who shall say the final word. He appears undecided, but we bet with 70% probability that he will concede Istanbul to Imamoglu.
There are signs of both Turkey and the US searching for a way out of the S-400 crisis, where we propose three face-saving compromises. We can’t promise a break-through, but tensions have calmed visibly over the last two weeks.
February industrial production and few other indicators suggest that we could see modestly positive growth in the first quarter, q/q, but this will prove entirely unsustainable, we insist. Meanwhile, responding to the contraction in activity with a lag, as usual, unemployment rate is approaching levels seen during the GFC.
Budget performance through March and underlying trends are very poor, suggesting that this year’s targets are likely to be missed by a wide margin.
At this week’s MPC meeting, we do not expect the CBRT to change interest rates nor its rhetoric. In fact, we continue to believe rate cut expectations are highly unrealistic for the entirety of this year.
Cosmo persecutes the CBRT by accepting the accusation that it has boosted reserve data with SWAP transactions to aid state banks to defend the currency, may Deities forgive Him for throwing the first stone. He then attempts to decipher Minister Albayrak’s strategy.
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