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Lira Goes Offered After Erdogan Replaces CBRT Dep Gov

TRY
TRY has taken a hit after Turkish Pres Erdogan sacked CBRT Dep Gov Cetinkaya and replaced him with Mustafa Duman. Erdogan's latest decree came just a week after his decision to oust the former CBRT Governor jolted the lira. Spot USD/TRY last sits at TRY8.2672, ~570 pips higher on the day.
  • USD/TRY implied volatilities popped higher across the curve, but remain way off levels printed after the ousting of the previous CBRT Gov Agbal.
  • New CBRT chief Kavcioglu told BBG yesterday that he does not "approve a prejudiced approach to MPC decisions in April or the following months, that a rate cut will be delivered immediately."
  • A break above the nearby TRY8.2878, the 76.4% recovery of the intraday pullback from Mar 22 high, would put bulls in a position to target TRY8.4707, the cycle high printed amidst last week's CBRT turmoil. Further gains would allow them to set their sights on the all-time high of TRY8.5793, registered on Nov 6, 2020. Bears would be pleased by a slide under Mar 22 low of TRY7.6958.
  • Worth noting that Turkish trade balance hits the wires Wednesday, while Markit M'fing PMI comes out Thursday.

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