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TCMB Cuts 150 bps as Borsa Istanbul Strengthens its Medium-Term Outlook

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Turkey’s central bank delivered a 150-basis-point rate cut at its final meeting of the year — a move broadly anticipated by markets — helping the BIST 100 index break a key technical barrier and reinforce its medium-term bullish structure. Bonds, FX, and precious metals all recalibrated following the decision, while global risk appetite improved after the latest Fed rate cut.

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BIST 100: Medium-Term Trend Strengthens Above 11,160

The BIST 100 index extended gains after the TCMB’s rate decision, decisively moving above the critical 11,160 resistance, which had capped prices in previous weeks. Clearing this level:

  • Invalidates the prior topping formation

  • Breaks the medium-term descending channel

  • Confirms the continuation of the upward trend

Next upside targets stand at 11,500 and 11,600.
Above 11,160, tactical long positions remain favorable.

The banking index saw mild profit-taking after recent strong outperformance; the key support stands at 16,180.

TCMB Cuts Rates by 150 bps, Keeps Easing Bias in Place

The central bank lowered:

  • Policy rate: 39.5% → 38%

  • Overnight lending rate: 42.5% → 41%

  • Overnight borrowing rate: 38% → 36.5%

In its statement, the TCMB noted:

  • November CPI was lower than expected due to food prices

  • Core inflation eased slightly in October and November

  • Q3 GDP growth exceeded forecasts

  • Demand conditions continue to support disinflation

  • The Bank remains committed to a “tight stance until price stability is achieved”

The committee reiterated that the pace of easing will be determined meeting-by-meeting and remains conditional on the inflation outlook. The Bank also stated it would re-tighten policy if inflation deviates materially from interim targets.

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Bond Market: Yields Hover Near Short-Term Lows

Domestic yields eased slightly following the TCMB decision:

  • Benchmark bond: 38.19%

  • 10-year bond: 30.69%

Yields remain anchored near short-term troughs following several weeks of downward momentum driven by expectations of continued policy easing.

Turkey’s 5-year CDS dropped to 225, its lowest level in seven years.

U.S. Treasury yields declined after the Fed’s quarter-point cut, with 10-year yields stabilizing around 3.14%.

USD/TRY: Gradual Uptrend Continues

Despite global dollar weakness, the Turkish lira did not benefit materially.
USD/TRY continues to grind higher:

  • Testing 42.70 resistance

  • Above it, 42.80 and 42.90 are next

  • Supports sit at 42.60 and 42.50

The pair maintains a short-term upward bias.

EUR/USD: Trend Turns Positive Above 1.1650

The euro surged following the Fed decision, breaking above the 1.1650 resistance — a key descending-channel cap.

Above 1.1650, the medium-term outlook strengthens noticeably:

  • Immediate resistance: 1.17

  • Secondary target: 1.1730

  • Key upside objective: 1.18

The bias remains to the upside while EUR/USD holds above 1.1650.

Gold: Bullish Breakout Points to New Highs

Gold rallied sharply after the Fed cut rates:

  • Resistance levels at $4,245 and $4,265 were broken

  • The short-term outlook is firmly bullish

  • Next targets: $4,300 and $4,382 (all-time high)

In Turkey, the combination of a rising USD/TRY and strong global gold prices pushed gram gold above 5,800 TL toward its 5,900 TL record.

Macro Watch: Current Account and Expectations Survey

Key domestic data releases today:

  • 10:00 — Current Account Balance (Oct.)

  • 10:00 — TCMB Market Participants Survey (Dec.)

These indicators will shape expectations for the next phase of the easing cycle.

Global Markets: Fed Decision Lifts Risk Appetite

Global equities rallied as:

  • The Fed delivered a 25 bps cut

  • Projections for 2026 maintained the expectation of only one cut

  • Investors embraced the improving risk backdrop

The S&P 500 remains near record highs, while the Dow Jones hit another all-time peak.

Outlook for BIST 100

  • Support: 11,000

  • Key pivot: 11,160

  • Targets: 11,500 → 11,600

Investors seeking a mix of fixed-income and limited equity risk may favor balanced or variable funds during this phase.

IMPORTANT DISCLOSURE

PA Turkey aims to inform Turkey-watchers with diverse views and opinions. Articles may not represent the editorial board’s stance.

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