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Citi Say Unwind of TRY/JPY Longs May Be Adding to Today’s Move

TURKEY
  • Citi write that interbank volumes were light overnight, but picked up once the USD/TRY 23 handle was broken, with the average bid/offer spread "blown out". The timing and speed of policy normalization towards conventional monetary policy remain the key questions ahead.
  • They flag that the unwind of TRY/JPY longs from Japanese retail may be adding to the move, with the recent build up in positioning supporting this view - namely an unwind of positions initiated in late May. Citi see room for this to continue.

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