General Assessment
Today marks Fitch and Moody's first Turkey credit rating review of 2026. Both agencies currently rate Turkey three notches below investment grade with a "stable" outlook. Given the recent positive momentum in Turkey's disinflation process and economic stability measures, there is growing anticipation that at least the country's outlook could be upgraded.
Moody's previously upgraded Turkey's credit rating from B1 to Ba3, citing the consistent implementation of effective policies to curb inflation and restore confidence in the lira. Turkey's annual inflation rate dropped sharply from 72% in June 2024 to 35% a year later. Both agencies project continued disinflation through 2026.
In the US, markets continue their rally following Trump's decision to pull back European tariffs. Tech stocks are showing strong performance, particularly ahead of Intel's earnings report today. Alphabet gained 1.8% after Raymond James upgraded shares to "strong buy." Markets are focused on next week's Fed FOMC meeting and today's PCE inflation data release.
Market Movements
Gold hit a new record at $4,956, on track for its strongest weekly performance since March 2020. Lingering geopolitical risks and a weaker dollar continue to support precious metal demand. Trump's announcement of a "framework deal" with NATO on Greenland has not fully resolved uncertainty. Goldman Sachs maintains its year-end target at $4,900, while J.P. Morgan targets $5,055.
Bitcoin is holding at the $90,000 level. Bernstein analysts wrote, "We believe with reasonable confidence that bitcoin and broader digital asset markets have bottomed," pointing to $80,000 in late November as the floor. The firm maintains its 2026 target of $150,000 and 2027 target of $200,000. The RSI indicator at 43.2 reflects neutral momentum.
BIST 100 retreated 2.6% on profit-taking after hitting an all-time intraday high of 12,838 the previous day. The index has been in an uptrend for three consecutive weeks and has gained 13.5% year-to-date. Turkey's 5-year CDS narrowed to 204.5 basis points, the lowest since May 2018. USD/TRY reached 43.38, a one-month high.
Looking Ahead
The Fed's January 27-28 FOMC meeting remains critically important. Markets are not pricing in a rate cut in January and expect rates to hold at 3.50-3.75%. The PCE inflation and GDP data to be released on January 29 will provide clues about the Fed's roadmap for the year. Intel's after-hours earnings report today could set the direction for the semiconductor sector.