The winners of the war are emerging; female unemployment is on the rise in Turkey

There’s some interesting news this week… The figures reveal the real winners of the US and Israeli attacks on Iran. Shell has doubled its profits, whilst it has emerged that the cost of the war to the US (in terms of weapons spent) stands at 47 billion dollars. In other words, a portion of the money that will end up in the pockets of arms manufacturers…

Meanwhile, the three major central banks – the US, Europe and Japan – did not change their interest rates as expected. However, the decision by European Central Bank (ECB) President Christine Lagarde to step down early came as a surprise, causing the euro to rise as a result. Oil prices fluctuated throughout the week amid concerns that the US was preparing to attack Iran following the 3 November mid-term elections. The excessively high levels of debt in Europe’s major economies are fuelling fears of a crisis. In the US, meanwhile, there is a strong sense of anxiety that the artificial intelligence bubble is set to burst, and Wall Street is also experiencing volatility.

Turning to Turkey… The key topic of the week is unemployment… Whilst the unemployment rate has reached a seven-month high, the number of people classified as unemployed under the broad definition has reached 13 million. Broadly defined unemployment among women has risen to 40.4 per cent.

The week’s key developments are as follows:

Unemployment at a seven-month high; women are staying at home

The Turkish Statistical Institute (TÜİK) has released the labour force statistics for September. The unemployment rate rose by 0.5 percentage points compared to the previous month to 8.4 per cent in September, reaching its highest level in the last seven months. The number of unemployed people increased by 198,000 to 2,967,000. The unemployment rate was last at 8.4 per cent in February 2026.

Whilst the narrowly defined unemployment rate – often presented as a ‘success’ – has also begun to rise, so too has the other side of the unemployment coin: those who have given up looking for work, the underemployed, and those who are ready to work but are not looking for a job – in other words, the broadly defined unemployment rate. The broad-definition unemployment rate rose to 31.2 per cent in September. According to DİSK-AR’s calculations, the number of people classified as broadly unemployed stood at 12,762,000. The increase in the number of broadly unemployed over the past year amounted to 423,000.

The gap between the broad-based unemployment rate—which reveals the true scale of unemployment—and the narrow-based unemployment rate is widening. As of September, this gap had reached 22.8 percentage points. According to an analysis by the Birgün newspaper, such a significant widening of the gap demonstrates that unemployment is not limited to those actively seeking work, but that millions of citizens are trapped in a cycle of despair and disengagement from working life.

Broadly defined unemployment among women stands at 40 per cent

Unemployment among women continues to exceed that of men. For women, who are effectively excluded from the labour market, the unemployment rate is higher than the average unemployment rate. The narrowly defined unemployment rate was estimated at 6.9 per cent for men and 11.3 per cent for women. Broadly defined unemployment stood at 25.6 per cent for men and 40.4 per cent for women. The difference between broadly defined female and male unemployment was 14.8 percentage points.

The unemployment rate amongst the young population aged 15–24 also rose by 1.6 percentage points compared with the previous month, reaching 14.8 per cent. Within this age group, the unemployment rate was estimated at 10.4 per cent for men and 23.3 per cent for women.

The trade deficit fell to $5.2 billion in September

TÜİK has released its foreign trade balance figures. In September, the trade deficit fell by 25.8 per cent compared with the same period last year, dropping to $5.2 billion. During the same period, exports rose by 15.3 per cent to $26 billion, whilst imports increased by 5.6 per cent to $31.1 billion.

In his assessment of the September foreign trade statistics, Trade Minister Ömer Bolat stated that the country had achieved the second-highest monthly export figure in the 103-year history of the Republic, as well as the highest September export figure, with a double-digit growth rate. Bolat noted that exports in September stood at $25.967 billion, representing a 15.3 per cent increase compared to the same month last year.

Regulation affecting pensioners: Labour Minister sets a date

A date has been set for the regulation signalled by President Recep Tayyip Erdoğan’s statement, “We will improve the situation of our pensioners”. Minister of Labour and Social Security Vedat Işıkhan announced that the regulation would come into effect on 1 January 2027.

Vice President Cevdet Yılmaz, however, said, “This is not a measure specifically concerning minimum pensioners, but rather a more general initiative aimed at our pensioners.”

Food prices have been rising for 76 months

According to the KAMUAR food survey, prices rose by 2.7 per cent in September, whilst the annual increase stood at 52.3 per cent. The survey, which shows that food prices have not fallen for 76 months, noted that the cost of a basket of goods, which was 100 lira in 2021, has reached 2,343 lira.

Interim payments begin in fund liquidation

Following the fund fraud scandal, interim payments began on Friday 30 October for investment funds included in the extraordinary liquidation process. Payments, to be made via İş Bankası and Ziraat Bankası, will prioritise money market funds. Whilst a total of 68 billion lira has been paid into 71,899 accounts so far, the new payments are expected to be completed by mid-November.

BlackRock, the world’s largest asset manager, has withdrawn from Turkey

The Frontiers Investment Trust fund, managed by BlackRock – the world’s largest asset management firm – has significantly reduced its equity investments in Turkey. The fund, which had allocated 11 per cent of its portfolio to Turkey in February, saw this proportion fall to 0.6 per cent by the end of September. BlackRock CEO Larry Fink had met with President Erdoğan in March.

ING’s year-end dollar forecast: 51.50 TL

ING, the international bank that had previously forecast the Central Bank’s interest rate cut, has announced its year-end dollar/TL forecast as 51.50. The bank, which also highlighted the risks to the economy posed by the fund investigation, expects the policy rate to fall to 35 per cent and inflation to drop to 29 per cent by the end of the year.

Fitch’s growth forecast for Turkey’s debt capital market

Fitch Ratings expects Turkey’s debt capital market to continue growing, with the total value of outstanding debt instruments reaching 550 billion dollars by 2027.

According to the agency’s “Turkey Debt Capital Markets Monitor” report, the total value of debt instruments in circulation in the market rose by 4 per cent year-on-year to exceed $526 billion by the end of the third quarter of 2026. Confidence fell in the services sector, whilst it rose in construction and retail trade. According to TÜİK data, the seasonally adjusted confidence index in the services sector fell by 2.4 per cent month-on-month in October, dropping to 109.2. The retail trade confidence index rose by 1.1 per cent to 112.5, whilst the construction confidence index increased by 0.4 per cent to 83.3. Europe’s debt is a cause for concern. According to data from the European special edition of the International Institute of Finance’s (IIF) Global Debt Monitor report, the total debt of 32 European countries hit a record high, exceeding 95 trillion dollars in the first half of 2026. According to a report by CNBCe, rising borrowing costs and political uncertainties are making it difficult to bring debt levels under control. According to the report, the region’s debt reached approximately 25 per cent of the global total. The ratio of Europe’s total debt to gross domestic product (GDP) was calculated at approximately 325 per cent. This ratio remains more than 45 percentage points below the level seen at the start of the Eurozone debt crisis. France is the most indebted country. In terms of total debt stock, France ranked first with $15.5 trillion. France was followed by the UK with $14.7 trillion, Germany with $13.5 trillion, and Italy with $7.2 trillion. In terms of the sectoral breakdown of debt, financial institutions accounted for the largest share at $30.4 trillion. Debt held by non-financial corporations stood at $26.4 trillion, public sector debt at $22.5 trillion, and household debt at $15.7 trillion. France was the country in the European Union where borrowing costs rose the most this year. The country’s 5-year credit default swap (CDS) spread rose above 100 basis points, reaching its highest level since late 2012. Italy’s CDS spread, meanwhile, was calculated at approximately 75 basis points. The Fed left interest rates unchanged, stating that “more data is needed.” The US Federal Reserve (Fed) kept its policy interest rate steady at 3.75–4.00 per cent. The Bank emphasised the importance of assessing further economic data to determine the appropriate monetary policy stance. The interest rate decision was taken by a vote of 10 to 2. Fed Board Member Lisa Cook and Cleveland Fed President Beth Hammack voted against the decision, favouring a 25-basis-point increase in the interest rate. The Fed noted that productivity growth in the US economy remains strong and that capital investment is holding up well. The statement indicated that, despite high levels of economic uncertainty, domestic spending has remained resilient. According to the statement, employment growth is in line with labour force growth, whilst the unemployment rate has shown only limited change.

Investment banks expect a rate hike at the December meeting

Meanwhile, major investment banks such as Goldman Sachs, Citigroup, Crédit Agricole, Nomura, TD Securities, Huatai Securities, Morgan Stanley and BNY Mellon forecast that the Fed will implement a 25-basis-point interest rate hike at its December meeting. TD Securities and Morgan Stanley also expect a 25-basis-point hike in March following December’s meeting. BNY Mellon, however, assesses that the policy rate could peak at just over 4.5 per cent next year.

Expectations of a rate rise in December have eased

According to CME FedWatch data, the market’s pricing of the probability of a rate rise in December has fallen from 84 per cent prior to the Fed’s decision to approximately 78 per cent. Investors are monitoring inflation data and messages from monetary policy officials to shape their expectations regarding the Fed’s next moves.

The US economy grew by 3.4 per cent in the third quarter

The US economy grew by 3.4 per cent year-on-year in the third quarter of 2026, recording its highest growth rate in a year. This rate exceeded market expectations of 3.2 per cent – compared with the 2.2 per cent increase in the second quarter – and marked a one-year high. The economy had grown by 2.2 per cent in the second quarter. Market expectations had been for growth of 3.2 per cent.

In the third quarter, the rise in real GDP was driven by increases in investment, consumer spending and public expenditure. Whilst a fall in exports partially offset this growth, imports increased.

ECB announces interest rate decision; early exit decision takes centre stage

The European Central Bank (ECB) left its policy rate at 2.65 per cent and its deposit rate at 2.5 per cent. However, the markets’ focus was on ECB President Christine Lagarde’s decision to step down early.

Lagarde announced that she would step down in February 2027, despite her term of office not ending until October 2027. Lagarde stated that her decision to step down early was driven by a desire to speak freely on matters outside the scope of monetary policy, adding, “I do not believe I can remain impartial at this stage.”

Noting that rising energy prices were having a negative impact on consumer confidence, Lagarde warned that fiscal uncertainty could further tighten financial conditions.

The strongest candidates to succeed Lagarde are Klaas Knot of the Netherlands and Pablo Hernandez de Cos of Spain.

The news of her early departure triggered buying of the euro in global foreign exchange markets, with the EUR/USD exchange rate rising above 1.12 dollars.

Japan keeps interest rates at a 33-year high

The Bank of Japan (BoJ) kept interest rates unchanged. At its October meeting, the BoJ voted 8 to 1 to leave the policy rate at 1.25 per cent. The bank raised its growth forecast for the 2026 financial year from 0.6 per cent to 0.7 per cent, whilst maintaining its inflation forecast at 2.5 per cent.

The war is benefiting oil giants; Shell’s profits have doubled

Driven by the war in the Middle East and the tightening of global fuel supplies, Shell’s third-quarter profit rose to $10.81 billion.

The company’s adjusted profit doubled from $5.43 billion in the same period last year to $10.81 billion, exceeding analysts’ expectations. The oil giant achieved its highest quarterly profit since 2022 whilst also setting a record for refinery profit margins.

The cost of the war in Iran to the US has emerged: the Pentagon’s figures have been exceeded

The cost of the US war against Iran has exceeded $47 billion, surpassing the Pentagon’s July estimate by more than 25 per cent. Losses of ammunition and military equipment have driven up the bill, whilst a decline in critical weapons stocks has also drawn attention.

According to a Reuters report, the operational cost estimate of $37.5 billion announced by US Defence Secretary Pete Hegseth in July has risen significantly as the war has continued. Based on the Pentagon’s latest calculations, it is projected that $29 billion will be spent on replenishing ammunition used in the fighting, whilst over $6 billion will be spent on replacing lost military equipment and platforms.

World Bank commodities report: Rise expected in energy and food prices

In the October edition of the World Bank’s Commodity Markets Outlook Report, it is forecast that oil supply will fall by 5.2 per cent in 2026 and that energy prices will rise by 32 per cent. The report warns that, should the conflicts in the Middle East intensify, the price of Brent crude could reach an average of $105 in 2027.

The report highlights that the world has become more vulnerable to new supply shocks as oil stocks decline, noting that energy prices are forecast to rise by 32 per cent in 2026 following a three-year decline, before falling by 11.5 per cent in 2027. The report states that food commodity prices are expected to rise by 10.3 per cent in 2026 and 7.2 per cent in 2027, due to the conflict disrupting grain shipments, El Niño threatening harvests, and high fuel and fertiliser prices increasing agricultural production costs. It was reported that overall commodity prices are forecast to rise by 23.1 per cent in 2026 before falling by 7 per cent in 2027.

Brent crude has its sights set on a new high…

Brent crude approached $115 following reports that the US had warned certain Gulf states of a possible new military operation against Iran in the wake of the mid-term elections. The January-dated Brent crude futures contract rose by more than 1 per cent to $112.43 per barrel on the morning of Friday 30 October, having earlier reached a high of $114.06.

A worrying forecast from UBS for the end of the year

UBS has forecast that Brent crude will reach $110 per barrel by the end of 2026, citing geopolitical uncertainties in the Middle East and the risk of supply disruptions. The bank has also raised its price forecasts for March, June and September 2027 by $5 each.

UBS raised its March 2027 price forecast for Brent crude from $90 to $95 per barrel, its June 2027 forecast from $85 to $90, and its September 2027 forecast from $80 to $85.

The impact of artificial intelligence on Microsoft’s financial results

Microsoft’s net profit rose by 32 per cent year-on-year to $36.6 billion. Alphabet’s revenue grew by 25 per cent to $127.6 billion, whilst its net profit fell. Investments in artificial intelligence and cloud computing featured prominently in the financial results of both tech giants.

Microsoft’s revenue for the first quarter of the 2027 financial year rose by 19 per cent to $92.3 billion, up from $77.7 billion in the same period last year.

Alphabet’s revenue rose, but net profit fell by 25 per cent

Alphabet, Google’s parent company, saw its revenue reach $127.6 billion in the third quarter of 2026, a 25 per cent year-on-year increase. The company had generated revenue of $102.3 billion in the same period last year.

However, Alphabet’s net profit fell from $34.98 billion last year to $26.2 billion. Earnings per share also fell from $2.87 to $2.12.

The fact that the company’s search advertising revenue results failed to meet expectations, coupled with rising cash outflows as artificial intelligence investments accelerated, increased the pressure on its shares.

Alphabet’s decline hit the Nasdaq: AI concerns are mounting

Alphabet’s search advertising results, which fell short of expectations, and the rise in artificial intelligence expenditure dragged the Nasdaq down by 1.38 per cent on Thursday 29 October. On a weekly basis, there was a 0.88 per cent increase, whilst the S&P 500 also rose by 1.27 per cent over the week. Investors are focusing on the financing of artificial intelligence investments and rising borrowing costs.

Fitch: Three major risks loom

International credit rating agency Fitch Ratings reported in its Global Risk Outlook report that credit risks worldwide had trended negatively in the last quarter. Fitch emphasised that, in particular, the sustainability of rapid growth in artificial intelligence investments, energy price pressures stemming from the Middle East, and rising financing costs are key determinants of the global outlook.

Whilst it was noted that the rise in bond yields is linked to rising real interest rates, it was stated that recent developments in the equity markets have heightened concerns regarding the levels reached by artificial intelligence investments. European consumer confidence hits rock bottom: lowest level since May. According to final estimates, consumer confidence in the European Union fell from a revised level of -16.1 in September to -17.3 in October 2026, reaching its lowest level since May.In the Eurozone, consumer confidence stood at -17.9 in October 2026. This figure represents a decline from September’s level of -16.8, also reaching its lowest level since May. Putin praises Elon Musk: ‘A true genius, we are in close contact. ’ Russian President Vladimir Putin described Elon Musk as ‘a true genius’ and revealed that they are in close contact. Putin shared details of the collaboration with US partners under the ‘Rassvet’ project, which Russia is developing as a rival to Starlink. According to the BBC, Putin said of Musk: “He is a genius, a true genius. We are in close contact with our American partners, including Mr Musk.”Putin stated that they are in communication to ensure that the Rassvet satellites developed by Russia do not interfere with the Starlink satellites operated by Musk’s company, SpaceX, whilst in orbit.