USD/TRY has climbed back toward the....>

TURKISH LIRA: USD/TRY has climbed back toward the week's opening levels (trading

at around 5.55 at writing), erasing much of the decline seen in the Monday

session as the TRY firmed in response to another climb in overnight swaps rates

(they traded north of 300% at some points of the session) and on speculation

that poor local election results for President Erdogan would result in a more

market-friendly President after his attacks on speculation over the past

fortnight.

-Overnight swaps rates have corrected lower today and it looks unlikely these

will continue to be used as a scorched earth policy tool against those short the

TRY. USD/TRY continues to trade either side of the 5.4948 200-dma and a

convincing break will be required to nudge the pair firmly in either direction

going forward.

-Erdogan's economic policy will enter the spotlight next week, with the Turkish

economy minister due to announce the government's new fiscal plans which could

result in a more activist government in financial markets.