Economy
Russia says sees no grounds for Black Sea grain deal to resume
Russia sees no grounds for the Black Sea grain deal to resume, Deputy Foreign Minister Alexander Grushko said Wednesday, as Russia and Ukraine continue to attack each other’s export facilities.
Türkiye and the United Nations helped mediate the so-called Black Sea Grain Initiative, which was agreed in July 2022 to allow the safe export of nearly 33 million metric tons of Ukrainian grain via the Black Sea, despite the war.
Russia withdrew from the agreement in 2023, complaining that its own food and fertiliser exports faced serious obstacles.
Türkiye has prepared a new plan for the safe passage of grain via the Black Sea and was contacting both countries in this regard.
“There was a deal … But a substantial part of it was not implemented. Do you see any change in the West’s position? I don’t,” Grushko told reporters on the sidelines of a forum in the Russian Far East port city of Vladivostok.
Both Russia and Ukraine are major grain exporters and their mutual attacks, in the wake of the Russian invasion of Ukraine in February 2022, have contributed to the increase in global wheat prices.
Russia continues to attack Ukraine’s Black Sea export facilities and those along the Danube River, damaging infrastructure and injuring three in Odesa, Ukraine’s largest seaport, in a fresh strike Wednesday, a city official said.
Tensions with Germany
The German government said Tuesday that it had concluded that Russia was responsible for an attempted drone attack at Leipzig/Halle Airport last month and ordered a series of measures in response, including a consulate closure in Bonn.
Russian President Vladimir Putin the same day accused Germany of planting the evidence in order to blame Moscow for the incident.
Grushko said on Wednesday Russia will retaliate to the Bonn consulate closure “very soon.”
Global stocks and bonds recuperated on Thursday, rallying ahead of the U.S. data and central banker comments that could reinforce investor expectations that the Federal Reserve (Fed) would raise rates later this month.
A recovery in global bonds helped improve sentiment in equities, while the yen powered towards its biggest two-day rally since a boost from official intervention early last month.
Oil reversed earlier losses to rise above $95 a barrel, as uncertainty prevailed over renewed military strikes between the U.S. and Iran.
In Europe, the STOXX 600 rose 0.2%, breaking three days of losses, while U.S. futures were up around 0.1%.
In premarket trading, shares in Broadcom fell around 2% after the company reported fourth-quarter revenue forecasts that fell short of expectations, while shares in Snowflake soared by over 20% after the cloud data platform provider delivered a stronger annual revenue forecast.
Investors’ immediate focus is Friday’s U.S. payrolls report after disappointing private labour data for August.
Fed Board Governor Christopher Waller is due to speak, after New York Fed President John Williams said on Wednesday rising long-term bond yields were a reflection of a solid economy rather than inflation fears, adding that he was still collecting information to drive his next monetary policy decision.
“There is an interpretation about why yields are moving higher – is it good, or bad?
I feel that the negative reasons are more often put forward than the positive reasons. Negative reasons being: too much supply of debt, fiscal risk, geopolitics and, normalization of risk premium because of oil. But it might be that a key reason behind higher yields is simply higher nominal growth,” Lombard Odier chief economist Samy Chaar said.
“If demand is strong and it’s demand that is keeping yields at high levels, it’s quite a good environment for multi-asset portfolios, in the sense that you want to be exposed to profit growth with equities, and you want to be exposed to carry as well, with credit,” he said.
Money markets currently assign a roughly 60% chance of a rate hike from the Fed this month, up from less than 40% a week ago.
Yen set for biggest two-day gain in a month
Sovereign bond yields fell, having hit multi-year highs in the last week as concerns have deepened about tighter monetary policy and deteriorating fiscal conditions.
Benchmark U.S. 10-year yields were down 2 basis points at 4.77%, while 10-year German yields were also down 2 bps at 3.353%.
The dollar index, which tracks the U.S. currency against a basket of six others, fell 0.4%, largely as a function of the push higher in the yen.
Mounting expectations that the Bank of Japan will raise rates sooner rather than later have pushed the Japanese currency up by over 2.5% in the last two days to trade around 156.1, set for its biggest two-day rise since a round of historic U.S.-Japanese intervention in early August.
The euro gained 0.18% to trade around $1.1609, while the pound was up 0.1% at $1.349 and the Swiss franc strengthened to 0.8087 francs, leaving the dollar down 0.5%.
In commodities, the oil price fell for the first time in nearly a week, although investors remained on edge after the U.S. and Iran exchanged their largest barrage of attacks since July, reviving fears of a broader regional escalation in the Middle East.
Brent crude rose for a fourth day, up 1% at $96.62 a barrel. Gold rose 1.1% to $4,434 an ounce. It is now nearly 13% above June’s seven-month lows, as geopolitical uncertainty and concern about the debasement of the U.S. dollar have lured investors back into the market.
The Dutch central bank on Wednesday said it had moved a large part of its gold reserves from North America to vaults in London over the past six months to be better prepared for a potential crisis.
Annual inflation in Türkiye cooled slightly to 31.5% in August, while month-on-month consumer prices advanced 1.84%, official data showed on Thursday.
The annual increase in prices was led by education, health and housing, the data from the Turkish Statistical Institute (TurkStat) showed.
The consumer price index (CPI) was down from 31.75% in July and marked a third straight month of easing in annual consumer prices depite ongoing conflict between the U.S. and Iran and rising prices.
Both figures came slightly below market expectations.
The consumer price index rose 22.07% compared with December 2025, while the 12-month moving average increase stood at 31.79%.
Commenting on the data, Treasury and Finance Minister Mehmet Şimşek said that inflation continued to fall despite seasonal increases in education prices and the impact of the war on fuel prices.
”Core goods inflation fell to its lowest level since November 2020 at 15.9% annually, while annual rent inflation dropped to its lowest level in 46 months,” he said on social media.
“While taking steps to limit the inflationary impact of global price shocks, we are also continuing our structural policies in line with our goal of lasting price stability,” he added.
New U.S. tariffs of up to 100% targeting foreign-made drones and certain components took effect on Thursday as Washington seeks to lower its import reliance in an industry widely dominated by China.
U.S. President Donald Trump signed an order setting out the duties in August, as the White House flagged “the national security threat posed by imports of drones and their components.”
The order also aims to boost domestic supply chains.
Drones with a takeoff weight exceeding 25 kilograms (55 pounds), as well as those with thermal imaging capabilities and docking stations, face a 100% tariff.
Smaller drones face a 25% duty.
Some components of drones that are “not particularly sensitive” will also face duties, but those only come into effect on Feb. 9 next year.
China expressed opposition to the planned tariffs shortly after they were unveiled by Trump, with Beijing urging Washington to withdraw the duties.
A commerce ministry spokesperson said the tariffs would “disrupt the global drone supply chain and further undermine a fair and competitive market environment.”
He said China firmly opposed the move.
Chinese company DJI, which was founded in 2006, has captured more than two-thirds of the global drone market in recent years, according to several studies.
Since 2022, however, DJI has been on a U.S. list of Chinese firms linked to the country’s military and subject to restrictions on access to U.S. technology.
DJI has fought its inclusion on the list.
A rise in housing supply and the return of residents to areas hit by Türkiye’s devastating 2023 earthquakes have begun to ease rent inflation, a study by the country’s central bank said Wednesday.
The quakes early on Feb. 6, 2023, were among Türkiye’s worst disasters that destroyed or damaged hundreds of thousands of buildings across 11 provinces, leaving more than 53,000 dead.
Government-led reconstruction efforts ever since have sharply increased housing supply in the affected provinces that were home to nearly 15 million people.
More than 36,930 buildings in the region collapsed, while about 311,000 were rendered unusable.
The region’s share of building occupancy permits issued across Türkiye rose to more than 20% in 2025, from an average of around 12% before the earthquakes, the Central Bank of the Republic of Türkiye (CBRT) said.
The increase in housing supply has been reflected in rental prices. Rent inflation in quake-hit provinces was significantly higher than in other regions in 2023 and 2024, but began to slow in 2025 as housing deliveries accelerated.
Remigration eases rental demand
The impact is also spreading beyond the earthquake zone, according to the CBRT study.
Rent inflation in provinces that were indirectly affected by the disaster remained broadly in line with other provinces in 2024 and 2025, but was significantly lower in 2026.
The report attributed the divergence in part to a gradual decline in rental demand in provinces that had received people displaced by the earthquakes, as residents began returning to the affected areas as housing stock recovered.
The remigration is therefore helping ease pressure on rental markets not only in the quake zone but also in surrounding provinces.
Construction capacity shifts outside quake zone
The reconstruction effort is also beginning to reshape the distribution of construction activity across Türkiye.
As major earthquake-housing projects near completion, employment in the construction sector in the affected region has started to decline, while construction employment in provinces outside the earthquake zone has increased rapidly, the report said.
The shift suggests that construction capacity developed during the reconstruction effort could increasingly be deployed elsewhere, potentially supporting a broader increase in housing supply.
The CBRT expects the increase in housing supply in the earthquake region to continue putting downward pressure on rent increases both directly in affected provinces and indirectly in surrounding areas.
The easing of rental inflation could also provide support to Türkiye’s broader disinflation process, the central bank said.
Turkish annual consumer price inflation cooled to 31.75% in July. The decline had stalled following a sharp rise in energy prices caused by the Iran war.
Global bond markets slid again Wednesday, pushing borrowing costs to levels not seen in decades as the Middle East conflict fuels higher energy prices and deepens fears over inflation and ballooning government debt.
Sovereign bond yields are a reference point for asset prices across financial markets, and the higher price of money means elevated mortgage rates for consumers and tough choices for government spending as funding costs climb.
The yield on 10-year U.S. Treasuries – which sets the tone for borrowing costs across the world economy – hit a three-year high. It is nearing the 5% level that could unsettle already jittery stock markets.
Japan’s 10-year yield was perched above 3% for the first time in 30 years, while rising gas prices meant German 10-year Bund yields were stuck at their highest since 2011 and Britain’s equivalent was at its highest since 2008. Yields rise as prices fall and vice versa.
A confluence of factors was at play, said State Street’s head of macro strategy, Michael Metcalfe, with rising energy prices causing traders to bet on rate hikes, pushing up short-dated yields.
“The narrative is also getting wrapped up with longer-term concerns about the fiscal path. In France and the U.K., we are going to get news on budgets soon. So, there are not many positives out there,” Metcalfe said.
Bond sales from big tech companies aggressively raising money to fund the AI boom have added pressure on the sovereign bond market, as deep-pocketed U.S. tech firms compete with governments for investors’ capital.
Naka Matsuzawa, chief macro strategist at Nomura Securities in Tokyo, said so-called hyperscalers’ willingness to pay reasonably high rates was pulling up yields broadly, with the focus now on whether growth can rise along with them to help economies cope with the higher rates.
Yields can continue to rise as investors demand a higher premium, said Charu Chanana, chief investment strategist at Saxo.
Bond vigilantes assemble?
Bonds have been under pressure since the start of the U.S.-Israeli war on Iran, but yields have hit multi-year highs in recent months on worries about rising debt loads in big economies, including the United States.
Governments are borrowing heavily after a jump in spending during the pandemic and the Ukraine war and energy crisis. They also face ageing populations, rising welfare bills, and higher defence investment needs.
Britain’s new government, led by Prime Minister Andy Burnham, will present a budget in October, while France is gearing up for further battles over its next budget.
And in Japan, the bond yield surge has put the spotlight on Japanese Prime Minister Sanae Takaichi and her aggressive investment plans.
The moves have raised the specter of “bond vigilantes,” investors who seek to impose fiscal discipline on governments by demanding sharply higher compensation to hold their bonds.
“The fear is that the bond vigilantes are on the loose and driving yields higher in protest over large government deficits,” said Ed Yardeni, president of Yardeni Research.
“We share the bond vigilantes’ concerns, but we aren’t convinced bond yields are, or will soon be, prohibitively high,” said Yardeni, who coined the term in the 1980s.
He said that if U.S. 10-year yields hit 5%, he expected Treasury Secretary Scott Bessent to issue more shorter-dated debt to buy back longer-dated bonds to calm markets.
The U.S. Treasury stepped into markets last month to cool long-end bond yields, though the impact was short-lived and 30-year Treasury yields are back near 19-year highs.
State Street’s Metcalfe said the sell-off in bonds was “orderly.”
Nick Ferres, chief investment officer of Vantage Point Asset Management in Singapore, said rates could start to cause pain for public and private borrowers, with higher yields also weighing on stock valuations.
Global stocks have broadly been supported by strong earnings, although they have weakened this week.
Higher yields can make bonds look more attractive and particularly dent the appeal of companies whose earnings potential lies far in the future, given the better return available on safe assets.
Policy in focus
Rising energy costs continue to dog economies, fuelling traders’ rate-hike bets.
Brent crude oil hit a one-month high Wednesday after the U.S. and Iran traded strikes, while European natural gas prices are at their highest since early 2023.
Federal Reserve (Fed) Chair Kevin Warsh triggered a sharp rise in bets on a September rate hike with a hawkish speech last week in which he acknowledged there had not been enough progress on inflation.
The rate-sensitive two-year Treasury yield is at 18-month highs.
Traders expect a European Central Bank (ECB) rate increase next week and price in about a 70% chance of a Fed hike the week after.
Work on Istanbul Airport’s fourth main runway has reached its final stage, with operations expected to begin in the coming days following technical tests, Transport and Infrastructure Minister Abdulkadir Uraloğlu said Wednesday.
The east-west runway is 2,820 meters (9,250 feet) long and 45 meters wide, Uraloğlu said, adding that it would further expand the airport’s capacity after it became the first in Europe to operate three independent runways simultaneously.
Istanbul Airport currently handles an average of 1,665 flights a day, making it Europe’s busiest airport, ahead of major hubs including London Heathrow, Paris Charles de Gaulle and Amsterdam Schiphol.
The airport also ranked sixth globally among 25 major airports, averaging 843 daily departures.
Istanbul Airport set a European record on Aug. 16 with 1,739 flights and 290,000 passengers, before renewing the record on Aug. 30 with 1,787 flights, Uraloğlu said.
The gleaming glass-and-steel structure along the Black Sea coast turned into one of the most important transit centers in aviation since it became fully operational in April 2019.
The hub can handle 90 million passengers a year in the current phase. The figure is nothing compared to its potential capacity to serve 200 million after completing all phases.
Istanbul Airport served record-breaking 84.4 million passengers in 2025, making it the second-busiest airport in Europe after Heathrow Airport and the eighth-busiest worldwide. It seeks to reach the 90 million mark this year.
Türkiye ranks sixth among European countries by air traffic volume, with an average of 4,400 flights per day, Uraloğlu said.
The minister said Türkiye now has 356 international flight destinations in 133 countries, dubbing it a major aviation hub connecting different continents.
The number of active airports in the country has risen to 58 from 26 in 2002, with the government renovating 16 previously inactive airports and building 16 new ones.
The number is expected to reach 60 as airports currently under construction are completed.
Türkiye has increased the number of countries with which it has air transport agreements to 175 from 81, while its international flight network has expanded from 60 destinations in 50 countries in 2002 to 356 destinations across 133 countries, Uraloğlu said.
Passenger traffic on domestic and international routes rose to a record 247 million in 2025 from about 34.5 million in 2002, he added, putting Türkiye third in Europe and seventh globally.
-
Politics2 days agoCivilians injured in PJAK terrorist attack in Iran
-
Economy3 days agoUS says world ‘cannot have China with $1.2 trillion trade surplus’
-
Economy3 days agoTürkiye’s economic growth holds up despite Iran war, tight policy
-
Economy2 days agoBank of America vice president killed in Times Square stabbing
-
Refugees2 days agoTurkey’s Erdogan says Russia will help build more nuclear plants
-
Economy3 days agoTürkiye’s trade with Organization of Turkic States members tops $10B
-
Economy3 days agoAI-driven cyber risk seen as top concern for global financial system
-
Economy3 days agoTürkiye’s EV maker Togg closes in on launch of affordable T6X model