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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EMERGING MARKETS
- USD/TRY 5y CDS +30% YTD, vs +8.1% in Russia & -4.5% in SA: reflecting the importance of idiosyncratic risks and local stories in delivering FX outperformance in 2021
- Embedded risk premia still remain acute in USD/TRY, given the 5Y CDS has yet to pare the topside breakout gap brought on by Ex-CBRT Governor Agbal's snap removal in March
- CBRT remains in a credibility deficit, with markets expecting a return to premature rate cuts to satiate Erdogan's desire for single-digit rates.
- By contrast, Russia has pared the majority of its US sanctions-induced move higher as Russia-Ukraine tensions dissipated rapidly into the start of April.
- Narrow scope of US sanctions and broader dampener mechanisms in the Russian markets (lower foreign OFZ holdings <20%, strong FX reserve position, lower USD debt, Undervalued RUB & CBR OFZ liquidity support) aided in limiting the fallout.
- With tensions cooling into the June Putin-Biden Summit, the direction of travel in Russia's CDS remains lower – with the US showing little appetite for escalating tensions with Russia.
- in SA Improving fiscal, current account & political dynamics have aided in risk premia compression and outperformance relative to peers Russia & Turkey.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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