Turkey's GDP expanded 4.8% in Q2

Turkey’s GDP expanded 4.8% y/y in Q2 2025, surpassing market expectations of 4.1%. The growth was driven by strong domestic demand, construction, and IT sectors, despite agricultural decline. Quarterly GDP rose 1.6% seasonally adjusted, the highest increase in two years. At current prices, GDP reached 14.6 trn Turkish lira (USD 378bn), up 43.7% annually.

The eurozone manufacturing PMI climbed to 50.7 in August 2025, marking the first expansion since June 2022 and signaling a potential end to the sector’s prolonged downturn. This improvement from July’s 49.8 reading was driven by rising new orders and strengthening domestic demand, with Greece and Spain leading regional growth while Germany remained slightly below the growth threshold at 49.8. Despite the positive momentum in output and orders, employment continued to decline and work backlogs fell for the 39th consecutive month, indicating ongoing structural challenges. Input costs rose modestly for the first time since March, though output prices continued falling and business sentiment remained stable.

In July 2025, European unemployment continued its downward trend, with the euro area’s seasonally adjusted unemployment rate falling to 6.2% from 6.3% in June and 6.4% in July 2024, while the broader EU rate dropped to 5.9% from 6.0% in both June 2025 and July 2024.

Today’s Economic Data and Events

13:00 Eurozone CPI, % m/m, Aug P. Forecast: 0.1%

18:00 US ISM Manufacturing Aug. Forecast: 49.0

Fixed Income

• The 2yr and 10yr treasury yields rose 1bps point to 3.6290 and 4,2439
• The Central Bank of the UAE carried out its regular m-bill auction at the start of the week. The bank raised AED 2.3bn in 28-day m-bills with a yield of 4.48% and a bid/cover ratio of 1.3x; AED 2.5bn of 70-day m-bills with a yield of 4.4% and bid/cover ratio of 1.6x; AED 2bn of 154-day m-bills with a yield of 4.39%; and AED 4bn of 266-day m-bills with a yield of 4.33%.
• First Abu Dhabi Bank mandated banks for a USD benchmark 5yr low-carbon bond.
• The sovereign wealth fund of Türkiye mandated banks for a USD benchmark bond.

FX

• The dollar index closed flat on Monday at 97.771.
• The Euro rose 0.2% on the back of the positive unemployment and pmi data to 1.1711 while the GBP declined 0.3% to 1.3545.
• The Indian Rupee stabilized at 88.2012.

Equities

• Locally, ADX and DFM closed down 0.8% and 1.6% respectively.
• Saudi Arabia’s Tadawul closed down 0.25%.

Commodities

• Brent futures closed almost flat at USD 68.4/b.
• Gold prices recorded a new all-time high climbing up 0.9% to 3508/troy oz amid a weaker US dollar and expectations of an interest rate cut.