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TRY Tracks Global Sentiment; Local Risk Premia Continue to Compress

TURKEY
  • USD/TRY opens higher after a strong week, now trading just below the 100dma at 7.7122 after revisiting November lows at 7.6230.
  • With limited local catalysts on the schedule outside consumer confidence data and seasonally quiet markets
  • price action should be dominated by global factors and CBRT rumblings ahead of Thursday.
  • Markets broadly expecting 150-200bp hike to the 1w repo in line with CBRT's tightening stance.
  • US stimulus developments should inject some volatility into the cross.
  • Topside resistance at 7.7445, 7.7721 & 7.7997 should cap upside in the short-term.
  • A move through 7.6230 support unlocks more downside.
  • 5y CDS trending lower towards 300 as risk premia compress (-16.7% last week).
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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