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TRY Choppiness To Persist Until We Get Sanctions Clarity From US

TURKEY
  • USD/TRY marginally higher, bucking the weaker USD trend with local factors continuing to dominate price action.
  • Upbeat industrial production data saw little effect on spot
  • Focus remains on Erdogan's reaction to EU & US sanctions
  • and when the US will officially impose CAATSA sanctions and to what degree they can impact the economy.
  • Base case remains for targeting officials, rather than financial institutions or USD transactions that would adversely affect TRY volatility and liquidity.
  • 8.00-7.7950 holding for now, headline risks from US sanctions remain prevalent.
  • 5Y CDS continues to tick up towards 400 on expanded sanctions risk premia.
  • Markets watching drilling vessels (Oruc Reis) for adherence to EU sanctions threats.
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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