Sell-Side Remains OW TRY & RUB; Urges Caution On Seasonal Illiquidity

SELL SIDE FX SUMMARY

• Consensus across majority of the sell side for sustained $ weakness into month-end, having taken out key support at 92.00.
• Positioning very net short, with warnings about seasonal illiquidity in December and conservative adjustments to position sizes.
• USD/TRY shorts still favoured on cleaner positioning, slowing local $ buying activity and continued steps to normalise monetary policy (TRY bank deposits this morning).
• 3rd consecutive widening of the trade deficit on sustained gold buying remains a concern, but insufficient to offset bearish momentum in USD/TRY.
• {sa} USD/ZAR: Bias shown to buy dips to balance out more decisive long positions in other EM crosses (RUB & TRY) but only for range trading rather than full correction.
• {ru} USD/RUB core shorts still being held with tax payment & exporter activity set to decline over the next two weeks.
• Concerns noted that if a new wave of inflows fail to materialise then the cross could drift higher above 76.00. OPEC+ indecision over extensions also a risk, should members opt for no extension.