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JPM See Back-to-Back 500bps CBRT Hikes

TURKEY
  • JPM write that Turkey’s medium-term forecasts as part of the MTP look “realistic”, with earthquake related spending suggesting further accommodation in Q4 of this year and into 2024.
  • They see upside risks to their 2023 year-end policy rate forecast of 35% as well as the 2024 year-end policy rate forecast of 45%.
  • JPM now expect rate hikes to be front-loaded with a 500bps hike in September and 500bps at the October MPC instead of their prior view of 250bps.
  • As such, they enter TRY OIS MPC2 payers (27-Oct-23 start, 24-Nov-23 maturity), with an entry at 32.40%, targeting 36% and reviewing at 31%.

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