All eyes are on TCMB's interest rate decision.
Key Takeaways
- Global markets traded negatively as oil prices rose and US inflation uncertainty increased
- Market attention centered on the Central Bank of the Republic of Turkey's policy rate decision
- Continued Middle East conflicts increased oil market volatility and hurt equity markets
Oil and geopolitical risk
Global markets traded negatively as oil prices rose again and uncertainty over inflation in the United States increased, while attention turned to the policy rate decision of the Central Bank of the Republic of Turkey (CBRT).
“Global markets traded negatively as oil prices rose again and uncertainty over inflation in the United States increased, while attention turned today to the policy rate decision of the Central Bank of the Republic of Turkey (CBRT)”
Continued conflicts in the Middle East affected pricing, causing volatility in the oil market and negatively reflecting on equity markets.
Although IEA member countries agreed to release 400 million barrels of strategic reserves—the largest amount in the agency's history—Iraq and Omani oil tankers were attacked by Iran, and oil prices rose sharply again, increasing risk perception in global markets.
International Energy Agency (IEA) head Fatih Birol reported the coordinated release, and the U.S. administration announced that 172 million barrels would be released from the Strategic Petroleum Reserve.
U.S. policy and inflation
U.S. policy moves and macro data added to market uncertainty.
The U.S. administration launched an investigation under Section 301 of the Trade Act of 1974 into policies and practices in the manufacturing sectors of 16 economies, including China, the European Union, Mexico and India, the USTR said.
U.S. President Donald Trump said the 400 million-barrel reserve would significantly reduce oil prices, claimed there is "almost nothing left" to target in Iran and added, "Whenever I want it to end, it will end," and U.S. media reported the administration will invoke the Defense Production Act to restart oil production along the California coast.
On the macroeconomic front, the U.S. Consumer Price Index (CPI) rose 0.3% month-on-month and 2.4% year-on-year in February, annual inflation remained at its lowest level since May 2025, and the federal budget deficit rose 0.2% in February to $307.5 billion.
Global market reactions
Markets and central banks across regions reacted to the energy-driven uncertainty.
“Global markets traded negatively as oil prices rose again and uncertainty over inflation in the United States increased, while attention turned today to the policy rate decision of the Central Bank of the Republic of Turkey (CBRT)”
The U.S. 10-year Treasury yield rose 3 basis points to 4.24% and the dollar index moved above the 99 level, while gold fell 0.6% to $5,146 an ounce and Brent crude traded up 6.1% at $97.3 a barrel.
New York stocks were mixed: the Dow Jones fell 0.61% and the S&P 500 fell 0.8% while the Nasdaq rose 0.8%; U.S. index futures opened the day lower.
European markets traded lower amid energy-supply concerns, Germany said it would release 19.5 million barrels from strategic reserves, and some expect the ECB to raise rates sooner because of Middle East tensions; Germany's DAX 40 fell 1.37%, Italy's FTSE MIB 30 lost 0.95%, the U.K.'s FTSE 100 declined 0.56%, and France's CAC 40 decreased 0.19%.
Asian markets were also negative as countries moved to use reserves: Japan's Prime Minister Takaiçi Sanae announced use of private and then government reserves without waiting for IEA coordination, the dollar/yen pair rose to the 159 level, and Japan's Nikkei 225 fell 2.3% while Hong Kong's Hang Seng fell 1.2% and South Korea's Kospi fell 1.1%.
Turkey market outlook
Turkey-specific market data and expectations focused on the CBRT decision and economic indicators.
Borsa Istanbul finished up 0.19% with the BIST 100 index at 13,200.38 points, the VIOP April futures contract based on the BIST 30 traded at 15,460.00 points down 0.24% from the regular session close, and the dollar/TL closed flat at 44.0826 and opened at 44.1150 in the interbank market, 0.1% above the previous close.
Analysts said markets will follow the CBRT's interest rate decision, balance of payments and money and banking statistics, while economists participating in AA Finans's expectation survey expect the CBRT to keep its policy rate unchanged at 37% in March, project a median year-end policy rate of 30%, expect a $5,186 million current account deficit in January, and forecast a 2026 current account deficit of $32,990 million.