Rate pressed higher still Tuesday,.....>

TURKISH LIRA: Rate pressed higher still Tuesday, adding to yesterday's gains to

top out at 6.1982, the highest level since October last year. The formation of a

golden cross (50-dma > 200-dma) has helped bulls further this week with

Erdogan's sabre-rattling this morning: "Turkey is facing economic sabotage",

"exchange rate - interest - inflation are the triangle of evil" also working

against the TRY.

-Political rancour has run higher this week as the Turkish election watchdog has

conceded that the Istanbul mayoral race must be re-run after Erdogan protested

his party's loss. New elections in the city will be held on June 23rd.

-USD/TRY's run higher today stopped just short of the 6.1992 level, marking the

50% retracement of the 7.2362 - 5.1621 move, with further resistance seen at

6.4439.

-Short-end implied vols have run higher, with 1m hitting the best levels since

end-April but are yet to recover back to recent cycle highs of 39.8 points.

USD/TRY hedging activity has been frenetic so far Tuesday, although USD/TRY puts

have been in demand, running somewhat counter to the price action in spot today.