Türkiye’s manufacturing capacity utilization rate remained stable in March, at 74.0%, while confidence in the real sector declined in the same month, official data showed on Tuesday.

On a seasonally adjusted basis, the capacity utilization rate in the manufacturing industry remained steady at 74.0% compared with the previous month, data from the Central Bank of the Republic of Türkiye (CBRT) revealed.

In contrast, the unadjusted rate declined slightly by 0.2 points, settling at 73.3%, according to the data.

The central bank also separately released the data showing that the seasonally adjusted real sector confidence index fell by 4.1 points to reach 100.0 in March.

The decline was attributed to negative assessments across all sub-indices.

Survey responses indicated weaker expectations for production volume over the next three months, a less favorable view of the general business outlook, reduced order volumes both in the past three months and currently, lower investment spending intentions, diminished export order expectations, higher inventories of finished goods and weaker employment projections.

According to CBRT data, the unadjusted seasonally adjusted real sector confidence index also declined, by 3.1 points compared to the previous month, and was at 101.0 in March.

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Turkish authorities pledged to continue taking necessary measures in strong coordination to limit the possible effects of global uncertainties and geopolitical tensions on the country’s economy, while also pursuing the inflation fight, according to a written statement shared by the Economic Coordination Council (EKK) on Tuesday.

The council held the meeting under the chairmanship of Vice President Cevdet Yılmaz and was attended by other top officials, including Treasury and Finance Minister Mehmet Şimşek and the governor of the Turkish central bank, Fatih Karahan.

In the written statement issued after the meeting, it was noted that the global economy “is going through a period of increased uncertainty and geopolitical tension.”

“In this conjuncture, the Turkish economy maintains its resilience to shocks, thanks to its strong macroeconomic fundamentals,” the statement read.

“With the program we are implementing, financial stability has been strengthened, and macroeconomic balances have improved significantly,” it added.

The Turkish government has been pursuing an economic program aimed at lowering inflation while focusing on sustainable growth. Since 2023, the authorities have adopted tighter monetary and fiscal policies, and inflation has regressed notably to around 30%.

The statement further emphasized that the Turkish economy “stands out positively” compared to many countries with its low public debt and budget deficit, strong reserve position, decreasing current account deficit, increasing inflow of external resources, and solid banking sector.

However, Türkiye, which shares a land border with Iran, also warned earlier that a prolonged conflict may weigh on the current account balance and inflation.

The conflict launched by the U.S. and Israel against Iran has resulted in higher oil prices and major disruptions in the Gulf region, which also risks supplies of fertilizers and thus poses a direct threat to global food prices and global inflation as well.

“On the other hand, the possible effects of geopolitical developments in our region and rising oil prices on the current account balance and inflation are being closely monitored,” the EKK statement also said.

Moreover, it also recalled that the so-called “sliding-scale pricing system” has been temporarily implemented to limit the impact of rising oil prices on inflation.

“In addition, through measures taken to ensure the supply of agricultural inputs and strategic stock management, the strong structure of agricultural production is being maintained,” it added.

On the side of energy, the statement noted that investments in domestic and renewable energy, which have been prioritized to reduce external dependence on energy and to permanently lower the current account deficit, “are being accelerated.”

“In this way, it is aimed both to strengthen energy supply security and to increase competitiveness,” it added.

Similarly, citing the rising uncertainties and protectionist trends in global trade, the statement suggested that this necessitates “the reshaping of external trade strategies.”

“In this context, efforts to update the customs union and adapt to green transformation policies with our most important trading partner, the European Union, are continuing.”

‘Necessary measures’

In this context, the statement reported that the Economic Coordination Council meeting evaluated macroeconomic developments, considered the potential effects of the U.S.-Israel-Iran war on the global economy and Türkiye, and discussed recent developments in Türkiye’s trade relations with the EU.

“To limit the possible effects of global uncertainties and geopolitical tensions on our economy, we will continue to take necessary measures in strong coordination,” EKK said.

“We will resolutely pursue our fight against inflation until permanent price stability is achieved. We will continue to take steps to protect our competitiveness and production capacity in the face of changing global trade conditions.”

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The European Union and Australia reached a long-awaited free-trade deal on Tuesday, while also agreeing to boost defense cooperation and access to crucial rare-earth minerals in the face of global uncertainty over energy and trade.

The announcement of the deal came after eight years of negotiations, during EU chief Ursula von der Leyen’s visit to Australia, as the 27-nation bloc and the import-reliant nation navigate renewed energy vulnerability sparked by the war in the Middle East.

The agreement aims to remove tariffs and commercial barriers on both sides to boost trade in goods and services.

The conclusion of talks is part of an EU push to diversify trading partners as tensions with China over alleged market distortion persist and relations with the U.S. have become tense under President Donald Trump.

“Today, we are telling an important story to a world that is deeply changing, a world where great powers are using tariffs as leverage and supply chains as vulnerabilities to be exploited,” von der Leyen told journalists in Canberra.

“In our story, open, rules-based trade delivers positive outcomes. Trust matters more than transactions,” she said.

“We are sending a strong signal to the rest of the world that friendship and cooperation are what matters most in times of turbulence.”

Australia’s Prime Minister Anthony Albanese said the agreement would benefit both sides.

“I am proud that we have been able to secure this deal, which will deliver benefits for both Australia and the European Union for generations to come,” he said.

Albanese and von der Leyen also presented a new Australia-EU security and defense partnership.

The Australian government said the “wide-ranging partnership” would boost cooperation across the defense industry, cyber, economic security, counterterrorism and hybrid threats.

Agriculture

One notable part that stands out in the trade deal is agriculture. The deal is expected to open the path to the flow of a variety of goods, but the move threatens to face objections from EU-based producers.

Tariffs will go down to zero from day one for key EU export products ‌such as wine and sparkling wine, some fruit and vegetables, including preparations and fruit juices, chocolate, sugar, confectionery and ice cream and many processed agricultural products, a Reuters report said, citing highlights from the deal.

Tariffs on EU cheese will go down to zero over three years.

The EU will ​also remove tariffs on most Australian agricultural products, including wine, nuts, fruit and vegetables, honey, olive ​oil, most dairy products, wheat, barley and seafood.

Australian beef, sheep meat, sugar, rice, ⁠wheat gluten, skimmed milk powder and natural butter will get either new or expanded tariff rate quota ​volumes.

European farmers’ group quickly slammed concessions easing exports of Australian beef, sugar and lamb to the EU in a trade deal struck Tuesday, saying they piled pressure on sectors already hit by previous accords.

“The cumulative impact of successive trade agreements makes these concessions unacceptable,” pan-European agriculture lobby group Copa-Cogeca said in a statement.

One of the sticking points in the negotiations was also the treatment of certain agricultural products whose names are protected in Europe and must meet specific production criteria, such as feta cheese, Gruyère and Parmesan. The use of the name “Prosecco” for Australian-produced wine was also a point of contention for the EU.

However, both sides ultimately showed willingness to compromise.

Approval needed

The deal needs to be approved by EU member states and the European Parliament, as well as by Australia, before it can be signed.

It is yet to be determined when the deal would enter into force, which will also depend on whether it is approved in the EU without delay.

The agreement provides for the abolition of more than 99% of tariffs on EU goods exports to Australia, which would save companies of all sizes around 1 billion euros ($1.15 billion) annually in duties, according to Brussels.

The agreement is also intended to make it easier for EU professionals to work in Australia.

According to the commission, industrial sectors that could particularly benefit from the agreement include mechanical engineering, chemicals, the automotive industry and agriculture.

The EU is also set to gain improved access to Australia’s strategically important raw materials, such as rare earths and lithium.

For Australia, the removal of tariffs on exports such as wine and seafood is significant, while more agricultural products, such as beef, could be exported to the EU in the future.

EU-Mercosur deal

The deal also follows a landmark free trade agreement between the EU and the Mercosur states Argentina, Brazil, Paraguay and Uruguay, which was recently referred to the European Court of Justice for a legal review by EU lawmakers, threatening to derail the deal even after a provisional implementation date has been set for May 1.

The EU-Mercosur deal, which was negotiated for over two decades, is viewed critically by European farmers as they fear increased competition.

Ahead of Tuesday’s announcement, the European Commission tried to dispel EU farmers’ concerns about the possible removal of protective measures by stressing the EU’s big trade surplus in agricultural goods.

According to EU figures, the bloc was Australia’s third-largest trading partner after China and Japan in 2024.

For the EU, however, Australia is a relatively minor partner, ranking 20th in terms of trade volume.

The difference is also due to the market sizes. The EU’s 27 member countries together have a population of over 450 million, while Australia has just under 28 million inhabitants.

Japan’s inflation slowed down in February, government data showed Tuesday, providing some relief, although it could soon pick up again as the Middle East war sparked a sharp rise in oil prices.

Prime Minister Sanae Takaichi – who was appointed leader in October – has promised to fight inflation as a major priority, with public discontent over rising prices a contributor to the downfall of her two predecessors.

Excluding fresh food, “core” consumer prices rose 1.6% year-over-year, the slowest rise since March 2022, down from 2% in January.

It was a bigger drop than expected, partly thanks to government energy subsidies.

Rice prices rose again in February, but at 16.6%, a far lower pace than in previous months.

Overall, consumer price growth, including fresh food, eased to 1.3% in February from 1.5% in January, with market consensus pegged at 1.5%.

However, Japan’s central bank said last week that it expected inflation to increase because of the “recent rise in crude oil prices” caused by the Middle East war.

Stefan Angrick of Moody’s Analytics also warned Tuesday that “the relief likely won’t last.”

“Government support was a key factor in February’s dip,” he wrote in a note.

“But with the conflict in the Middle East scrambling the outlook for commodity prices and growth, a fresh jump in consumer price inflation is a significant risk,” he said.

Worried residents

Some Tokyo residents said they were very worried about rising prices.

“I keep seeing in the news how oil is used in all sorts of things, everywhere,” said 45-year-old Manami Kinoshita.

And “when I look at things like egg prices, for example, I get the feeling that prices are gradually going up across the board,” she said.

“That part really concerns me.”

Japan depends on the Middle East for 95% of its oil imports. The government on Thursday began an emergency subsidy program to drive down the cost of gasoline.

It is hoped the gasoline subsidies will help bring petrol prices to around 170 yen ($1.06) per liter, Chief Cabinet Secretary and top government spokesperson Minoru Kihara has said.

The average gasoline price in Japan was hovering just below 160 yen per liter before the war began, according to the Oil Information Center, a Japanese industry research body.

Government officials expect it could take up to two weeks for the gas prices to come down to the target level.

Takaichi said Tuesday Japan would release another part of its strategic oil reserves from Thursday and would tap into joint stockpiles held by producing nations in the country as soon as this month.

The announcement came after Tokyo last week started releasing 15 days’ worth of private-sector petroleum reserves.

A joint reserve is held in Japan by Saudi Arabia, the United Arab Emirates (UAE) and Kuwait, according to the Petroleum Association of Japan.

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The European Union announced on Monday that a free trade agreement (FTA) signed with the South American bloc of nations (Mercosur) will provisionally enter into force on May 1, despite a pending court ruling on its legality.

The mammoth deal to eliminate tariffs on more than 90% of trade between the two blocs has proven divisive in Europe, with France leading opposition over concerns some of its farmers will be worse off because of it.

But, backed by a majority of EU countries, Brussels has ploughed ahead as it pushes to diversify trade in the face of challenges from the United States and China.

“Today is an important step in demonstrating our credibility as a major trading partner,” EU trade chief Maros Sefcovic said.

“The priority now is turning this EU-Mercosur agreement into concrete outcomes, giving EU exporters the platform they need to seize new opportunities for trade, growth and jobs.”

The move comes as Paraguay ratified the deal last week, becoming the last Mercosur member to do so after Argentina, Brazil and Uruguay.

“Provisional application ensures the removal of tariffs on certain products as of day one, creating predictable rules for trade and investment,” the European Commission, in charge of EU trade policy, said Monday.

It added that it had notified Mercosur partners.

“EU businesses, consumers and farmers can thus start reaping the benefits of the deal immediately.”

The EU had already signalled in February that it would provisionally implement the deal, prompting a public split between its two largest member states, France and Germany.

The pact still needs a green light from lawmakers in the European Parliament, which referred it to the EU’s top court within days of being inked in January.

France unsuccessfully attempted to block the deal over worries for its farmers, who fear being undercut by cheaper goods from Brazil and its neighbours.

The accord creates one of the world’s biggest free trade zones. Together, the EU and Mercosur account for 30% of global gross domestic product (GDP) and more than 700 million consumers.

It favors European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soybeans to enter Europe.

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Gold and silver prices continued to see sharp losses on Monday, with bullion failing to act as a traditional safe haven amid the Iran conflict, as rate cut hopes fade and markets are instead pricing higher borrowing costs to tame the potential rise in global consumer prices.

Gold slid more than 8% on Monday to ‌hit its lowest level in four months, after logging its biggest weekly loss in about 43 years last week, as an escalating Middle East conflict stoked inflation concerns and raised expectations of higher global interest rates.

Spot gold declined 6.3% to $4,203.21 per ounce by ​07:57 a.m. GMT, extending losses into a ninth straight session. It had shed more than 8% to $4,097.99 ​earlier in the session to its lowest level since Nov. 24.

The metal dropped more ⁠than 10% last week, its steepest weekly loss since February 1983, and has also retreated about 25% from its record peak of $5,594.82 ​an ounce reached on Jan. 29.

Silver has seen even steeper losses. Prices have dropped by nearly half from a record high of around $122 per ounce at the end of January. On Monday, silver fell a further 5% to around $64.25, leaving it down more than 30% since the Iran conflict began just over three weeks ago.

Later during the day, it slipped below $64.

Rising oil prices have increased inflation risks and reduced expectations for near-term interest rate cuts by the U.S. Federal Reserve (Fed) and other central banks. Higher interest rates typically weigh on non-yielding assets such as gold.

Monday’s decline wiped out all gains made since the start of the year. Gold has fallen nearly $1,300, or about 23%, from its record high of close to $5,600 in late January.

“With the Iranian conflict into its ​fourth week, and oil prices hanging around the $100 level, expectations have pivoted from rate cuts to potential rate hikes, which have tarnished gold’s appeal from a yield point of view,” said Tim Waterer, chief market analyst, KCM Trade.

Iran said on Sunday it ​would strike the energy and water systems of its Gulf neighbours in retaliation if U.S. President Donald Trump followed ​through with his threat to hit Iran’s electricity grid.

Asian shares fell, and oil prices stayed above $110 a barrel.

“Gold’s high liquidity ‌appears to ⁠be hurting it during this risk-off period. Downturns in stock markets are leading to gold portions being closed to cover margin calls on other assets,” Waterer said.

The closure of the Strait of Hormuz has kept crude elevated, stoking inflation fears by pushing up transport and manufacturing costs. While rising inflation typically boosts gold’s appeal ​as a hedge, high rates ​curb demand for the ⁠non-yielding asset.

“A reinforced shift from safe-haven allocation towards macro-driven positioning could skew risks further to the downside, as a firmer U.S. dollar and the receding probability of ​the Fed easing dominate the narrative,” said BMI, a unit of Fitch Solutions.

Market pricing ​for a ⁠U.S. Federal Reserve rate hike this year has shot up, with rate futures showing the U.S. central bank is more likely to raise interest rates than cut them by the end of 2026, according to CME’s FedWatch tool.

Other precious ⁠metals also ​declined sharply, including platinum, which was down 6.4% to $1,799.25.

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