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TRY Assets See Some Reprieve, Fresh Catalysts Eyed Next Week

TURKEY
  • USD/TRY opens slightly higher in line with a firmer USD at the start of the session.
  • TRY assets made a comeback in yesterday's session as the USD backed off from new highs amid falling UST yields.
  • TRY was the clear EM outperformer after two weeks of heavy selling, peaking just below 7.80. US CPI will be in focus today, with an upside surprise potentially supporting the inflation fear component fueling upside in USTs.
  • As mentioned yesterday, at these levels we may see fading interest returning to any rallies in USD/TRY with key catalysts entering the market next week in the form of a hawkish CBRT.
  • Pressure will remain on Agbal to anchor both price pressures & USD/TRY lower to reassert CBRT credibility and the de-dollarisation push.
  • Primary risk remains burgeoning Erdogan pressure to cut rates as inflation remains sticky, despite this being priced into the CBRT value function.
  • Intraday sup1: 7.5835, Sup2: 7.4769, Res1: 7.7079, Res2: 7.7835
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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