Morning Brief: Ceasefire Abroad, Rate Test at Home as Eyes Turn to TCMB

Global markets found temporary relief after the extension of the U.S.–Iran ceasefire, but geopolitical risks remain elevated. Energy and precious metal prices continue to fluctuate, while investors stay cautiously optimistic. In Türkiye, attention is firmly on the Central Bank’s rate decision, which is expected to shape near-term market direction.

Markets Stabilize as Ceasefire Extended

Global financial markets experienced heightened volatility after tensions escalated between the United States and Iran, driven by missed diplomatic deadlines and stalled negotiations. Risk appetite deteriorated notably, with investors pricing in the possibility of renewed conflict.

However, U.S. President Donald Trump’s decision to extend the ceasefire has helped calm markets, at least temporarily. Despite this, the continuation of the U.S. naval blockade on Iran signals that underlying risks remain unresolved.

Negotiations mediated by Pakistan are ongoing, but a lack of trust between the parties continues to undermine the process. Statements from Iranian officials suggest that the ceasefire extension is being viewed as a tactical pause rather than a step toward a lasting resolution.

Oil, Gold and Crypto Show Volatility

Markets are adopting a cautious “buy the good news” stance this morning. Brent crude, which had climbed to $101 per barrel during the previous session, has pulled back to around $98 following the ceasefire extension.

Still, the fragile balance in the Strait of Hormuz and ongoing threats to energy supply continue to present medium-term risks.

Gold prices remain volatile. After starting the previous day at $4,820 per ounce, gold fell sharply to $4,666 before recovering to around $4,760 this morning. Silver also saw sharp moves, dropping from $80 to $75 before rebounding above $78.

The U.S. dollar index strengthened amid rising geopolitical concerns. Meanwhile, Bitcoin defied traditional market patterns by climbing to $78,000. Analysts suggest that a weekly close above $76,000 could signal a breakout after a prolonged period of consolidation.

“See-Saw” Market Dynamics Persist

Market direction remains uncertain as geopolitical risks continue to dominate sentiment. Analysts expect ongoing volatility, with prices likely to swing sharply in both directions in the near term.

While there is cautious optimism that the worst-case scenario may have been avoided, markets are expected to remain in a “see-saw” mode until clearer signals emerge.

Mixed Performance Across Global Equities

U.S. equities, which closed down 0.6% before the ceasefire announcement, are attempting to recover, with futures pointing to gains of a similar magnitude.

In Asia, performance is mixed. Tokyo’s main index rose 0.4%, while Hong Kong declined 1.3%. South Korean equities traded largely flat, reflecting limited recovery momentum.

Markets appear to be maintaining a cautious stance in response to ongoing geopolitical uncertainties.

Özlem Derici Şengül: CBRT Likely to Hike Rates Amid Mounting External Pressures

Focus Shifts to Central Bank of the Republic of Türkiye

While global markets remain on edge, the key domestic focus is the Central Bank of the Republic of Türkiye’s (Central Bank of the Republic of Türkiye) monetary policy decision. The April Monetary Policy Committee (MPC) decision is scheduled for release at 14:00 local time.

Market consensus suggests that the policy rate will be left unchanged. In recent weeks, the central bank has effectively guided funding toward the upper band of its interest rate corridor (40%), rather than relying on the weekly repo rate (37%). As a result, the effective market rate has hovered around 40% since early March.

Although some analysts argue that a rate hike may be warranted, recent stabilization in foreign reserves and continued domestic demand for the Turkish lira support expectations that the central bank will hold rates steady. Notably, some London-based institutions disagree with this view.

Turkish Assets Remain in Wait-and-See Mode

The USD/TRY exchange rate is trading around 44.90 under close policy management, while Türkiye’s CDS risk premium remains stable at approximately 235 basis points.

In fixed income markets, the two-year benchmark bond yield has climbed to 39.81%. Turkish equities are also expected to remain cautious ahead of the central bank’s decision.

Decline in Real Sector Confidence Signals Weakness

Data released by the central bank show that real sector confidence declined significantly in April, falling by more than five points over the past two months.

This deterioration reflects the negative impact of geopolitical tensions on business sentiment. Rising costs and worsening expectations are contributing to a weakening economic outlook.

Fed Signals Potential Policy Shift

Another key development came from Kevin Warsh, a leading candidate for the Federal Reserve chair, who spoke before the Senate.

Warsh emphasized that he has made no commitments to President Trump regarding rate cuts and underlined the importance of policy independence. He also criticized the Fed’s recent inflation performance, suggesting that a new policy framework may be needed.

These remarks are being interpreted as a signal that changes could extend beyond interest rate policy to include broader tools such as liquidity management and balance sheet strategy.

ANALYSIS: CBRT Cannot Cut Rates, Economy Program Must Be Defended

Key Data and Events to Watch

While geopolitical developments continue to dominate global markets, Türkiye’s central bank decision remains the primary focus domestically.

On the macro front, investors will also monitor Türkiye’s consumer confidence index and UK inflation data later today.

Source: Emre Değirmencioğlu, Kıbrıs İktisat Bankası

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