Weekly Bulletin - August 8, 2025

This week, developments in US customs tariffs and statements by Fed officials regarding interest rate cuts affected the course of global markets. Factory orders in the US recorded their fastest monthly decline since the pandemic, falling 4.8% in June. In the Eurozone, monthly PPI inflation reached its highest level in five months at 0.8% in June, while retail sales increased on a monthly and annual basis. In Türkiye CPI rose by 2.06% in July, below market expectations, while annual CPI inflation fell to 33.52%. US inflation and supply-demand indicators stand out on next week’s global data agenda. In Türkiye, the CBRT will publish its third Inflation Report of the year, and current account and budget balance data, as well as industrial production figures, will be monitored.

US President Trump announced that India would be subject to a 25% additional customs duty due to its oil trade with Russia. It was announced that a 100% customs duty will be imposed on semiconductors imported into the US, and that chip manufacturers that produce or commit to producing in the US will be exempt from this additional duty. Trump stated that they are very close to a possible trade agreement with China and that he may meet with Chinese President Xi before the end of the year if an agreement is reached. Following the downward revisions to non-farm employment data, Fed officials emphasized in their statements this week that interest rate cuts would be necessary in the coming months. San Francisco Fed President Mary Daly stated that the data showed a weakening in the labor market and that there was no sign that tariffs would have a lasting effect on inflation, indicating that the time for interest rate cuts was approaching. Minneapolis Fed President Neel Kashkari also pointed to the slowdown in the US economy and said that interest rate cuts may be necessary in the short term.

Although monthly CPI inflation reached the highest level in the last three months with 2.06% in July, it was realized below market expectations. During this period, annual CPI inflation continued to decline due to the high base effect, falling to 33.52%. Monthly domestic PPI inflation fell from 2.46% in June to 1.73% in July, while annual D-PPI inflation stood at 24.19%.

This week, global risk perception improved as Fed officials gave messages supporting rate-cut expectations. The MSCI World and Emerging Market stock indices rose by 1.9% and 2.8%, respectively, as of Thursday's close compared to Friday's close. Oil prices fell by 4.7% due to the expected slowdown in global economic activity caused by US tariffs, as well as the OPEC+ countries’ output hike decision last weekend. Gold price rose by 1% to 3,397 USD, continuing its upward trend around historic highs. The BIST-100 index rose by 1.9% from the previous week's close to 10,956 at Thursday's close. Thus, the index extended its consecutive weekly rise to the seventh week. Türkiye's 5-year CDS premium decreased by 5 basis points to 275 basis points, while the USD/TL declined slightly. The yield on 2-year benchmark bond remained flat at 40.24%.