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USD/TRY Brushes off US Sanctions, But Faces Hurdles Ahead of EU Talks Today

TURKEY
  • Local & USD rates unch at the open having pulled lower in last week's session.
  • Belly of the local and USD curve remains most bid, with 5-9Y tenors outperforming into the back end of the week.
  • USD/TRY opens flat to lower on a softer greenback this morning, despite new sanctions on domestic Defense Industries (SSB).
  • Moreover, broad arrests for admirals engaged in the declaration alleging the possibility of withdrawal from the Montreux Doctrine saw little effect on TRY assets in yesterday's session, although opposition from EU's Michel & Von der Leyen in today's meeting could spark some concern for EU-Turkey relations.
  • USD/TRY remains pegged around 8.10, but may continue to drift lower, should USD weakness continue to be the prevailing theme.
  • Focus this week on 12-month CPI expectations ahead of next week's CBRT meeting.
  • Sell-side remains cautiously optimistic about comments from Kavcioglu that the CBRT will not ease prematurely.
  • Intraday sup1: 8.0985, Sup2: 8.00, Res1: 8.1793, Res2: 8.2046
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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