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BUNDS

Supply and ECB minutes in focus

GOLD TECHS

Remains Vulnerable

MARKET INSIGHT

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BRENT TECHS

(N2) Eyeing Key Resistance

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TURKEY
  • USD/TRY trades +0.62% higher this morning, paring most of the post-decision move lower towards 13.30.
  • As expected, the CBRT delivered a hold on policy at 14.00% in line with its forward guidance from the December statement.
  • Inflation was still deemed to be transitory and due to supply-side and ‘distorted’ exchange rate factors, with the MPC promising disinflation in the coming months – which stands at odds with all sell-side forecasts for a surge in inflation in 1H22.
  • Another new factor was the promise to target lira stability, but little guidance was provided about the policy reevaluation period.
  • We anticipate that deeply negative real rates will keep TRY under pressure in the coming month, forcing further non-standard policy measures in 1H22 over rate hikes.
  • Whether Erdogan will have room to deliver his promises for further “gradual” rate cuts ahead of 2023 elections remains to be seen in 2H22.
  • The initial TRY positive reaction came as expected, but was met with fading pressure.
  • Attention remains on 14.00 to the topside for a more meaningful move higher in the cross in the coming months.
  • Intraday Sup1: 13.3113, Sup2: 13.1653, Res1: 13.5419, Res2: 13.6614
  • 5Y CDS


MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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