Turkish Business Confidence (Aug) 102.8 (Prev. 102.20)

A modest uptick in Turkish business confidence sits in the category of soft data that rarely moves Turkish assets on its own; the series has historically been a secondary confirmation of the real-economy picture rather than a driver of the lira or local rates. What matters for the transmission is how it reads against the disinflation and rebalancing programme the central bank has been running: in past episodes of this kind, survey data holding above the 100 expansion threshold during a tight-policy phase has been taken as evidence that restrictive rates are not crushing activity, which tends to be neutral to mildly supportive for the carry-driven inflows that have anchored the lira trade. The distinction worth drawing is between confidence and the harder activity prints: industrial production, capacity utilisation and the PMI series have typically carried more weight with the CBRT and with positioning than sentiment alone. The follow-ons are the inflation print and the central bank's rate decision, since a resilient real economy alongside sticky services inflation is the combination that has historically argued for keeping policy tighter for longer. A print this close to the prior reading is, on past form, a non-event for the curve and for USD/TRY.