Monthly inflation data was released. Reflection of the figures in markets, the interest rate outlook and investor reaction.
The monthly CPI data released by **TÜİK** triggered rapid pricing movements in the markets.
**Data Summary**
Monthly CPI increase came in slightly above expectations. Core inflation picture is more moderate. The base effect on a year-on-year basis continues to be critical for calculations.
**Reflection in Markets**
The higher-than-expected reading reinforced the expectation that interest rate cuts will be delayed. Short-term rates in the bond market rose modestly. Equities were pressured on the initial reaction, but the index limited losses within the same day.
**Sector Impact**
The banking sector may benefit positively from a prolonged interest rate environment. Companies with higher borrowing costs (leveraged balance sheets) may be negatively affected. Companies linked to defense and public tenders are less exposed to this factor.
**Central Bank Outlook**
The MPC's "data-dependent" stance will continue at the upcoming meeting. Inflation passing its peak remains the critical condition for a signal.
**Investor Strategy**
Assets offering real returns in an inflationary environment (gold, inflation-linked bonds, foreign currency) are in demand. Nominal equity returns should be evaluated on a real basis.
