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Morning Brief: Markets Bet on Ceasefire Momentum as Oil Stays Elevated, Risk Appetite Fragile

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Global markets are rallying on expectations that the Iran conflict may de-escalate, but persistently high oil prices and ongoing geopolitical uncertainty continue to cap risk appetite. Turkish assets are showing cautious resilience amid this fragile backdrop.

Ceasefire Hopes Drive Market Recovery

Global markets remain focused on headlines suggesting a potential end to the Iran war. U.S. President Donald Trump has taken the lead in shaping expectations, reinforcing optimism that a ceasefire could soon materialize. The announcement of a 10-day ceasefire between Israel and Lebanon has further supported hopes for broader regional de-escalation.

The halt in Iranian-linked attacks on Lebanon is seen as a step toward removing key obstacles in U.S.–Iran negotiations. However, analysts warn that the current ceasefire remains fragile, and Tehran could still use Lebanon as leverage if negotiations stall.

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A Critical Test: Will the Ceasefire Hold?

Markets are now entering a decisive phase. With only days left before the current ceasefire expires, investors are closely watching whether it will be extended.

Key scenarios include:

  • Extension of the ceasefire: Likely to sustain market optimism and support risk assets
  • Breakdown in talks: Could trigger renewed volatility and risk-off sentiment
  • Uncertainty lingering: Markets may remain range-bound with heightened sensitivity to headlines

The coming days are expected to be pivotal in determining near-term market direction.

Oil Prices Remain a Key Risk Factor

Despite improving sentiment, oil prices continue to trade at elevated levels due to ongoing supply concerns, particularly around the Strait of Hormuz.

This dynamic has significant implications:

  • Persistent inflationary pressures globally
  • Higher import costs for energy-dependent economies
  • Continued strain on current account balances in emerging markets

Markets are increasingly aware that even with a ceasefire, energy supply disruptions may persist.

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Global Markets: Cautious Optimism

The overall tone in global markets is best described as “cautiously positive”:

  • U.S. equity futures rose modestly by 0.1–0.3%
  • Asian equities posted stronger gains, led by Japan (+2.5%) and Hong Kong (+1.5%)
  • U.S. 10-year Treasury yield stands at 4.29%
  • The dollar index is stabilizing around 98
  • Gold remains elevated at approximately $4,825 per ounce

While panic has subsided, investors remain far from fully risk-on.

Turkish Markets: Fragile Stability

Turkish assets are reflecting a similar pattern of cautious optimism. While easing tensions in the Gulf region are supportive, lingering geopolitical risks continue to limit stronger upside momentum.

FX: Turkish Lira Under Pressure

The Turkish lira remains under pressure, with USD/TRY trading around 44.85 and maintaining a mild upward trend.

Key technical levels:

  • Support: 44.50 – 44.00
  • Resistance: 45.00 – 45.50

The direction of the dollar index and global risk sentiment will continue to play a decisive role.

Fixed Income: Wait-and-See Mode

Turkey’s bond market remains in a holding pattern, with yields staying elevated:

  • 2-year benchmark yield: 39.43%
  • 10-year yield: 32.31%

Markets expect the Central Bank of the Republic of Türkiye (CBRT) to keep rates unchanged at the upcoming policy meeting. However, shifting geopolitical dynamics could still alter expectations.

Equities: BIST Near Critical Resistance

The BIST 100 index closed at 14,201, with the 14,500 level emerging as a key resistance threshold.

Market dynamics suggest:

  • Ongoing short-term profit-taking
  • Consolidation within the 14,050–14,500 range
  • Potential upside toward 15,000 if resistance is broken

The 13,750 level is seen as critical support for maintaining upward momentum.

Domestic Dynamics: Strong Demand for Turkish Debt

Turkey’s latest 5-year bond auction drew robust demand, with total bids reaching nearly three times the issuance amount.

Investor breakdown:

  • 44% from the UK and Ireland
  • 33% from the United States
  • 13% from Europe
  • 8% from the Middle East

This strong participation highlights continued foreign investor interest despite global uncertainties.

Bottom Line

Markets are currently driven by three key factors:

  1. The durability of the ceasefire
  2. The trajectory of oil prices
  3. Central bank policy responses globally

While sentiment has improved, the environment remains fragile, with markets effectively pricing in a relatively optimistic scenario. Any negative surprise could quickly reverse gains.

Turkish brokerage reports

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