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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
TURKEY
- USD/TRY spikes higher overnight to peak at 8.80 before retracing back to the 61.8% fib level at 8.6275 after Erdogan said he had spoken with CBRT Governor about lowering rates, citing the July-August Period.
- This concerning shift back to market inappropriate policy is precisely what markets have been expecting since former Gov Agbal's removal, and comes ahead of a higher expected inflation print tomorrow.
- This dovish shift is a major negative for CBRT credibility, de-dollarisation and TRY stability – which is likely to become untethered now that Erdogan has provided forward guidance towards the first cuts.
- This July-August period comes ahead of most expectations for a cut cycle with most sell-side forecasting 3Q-4Q21 and comes towards the front of our base case zone outlined at the previous meeting (3Q21).
- Failure to deliver cuts in the near-term will likely result in further staff turnover at the CBRT and even lower credibility in the eyes of the market.
- The direction of travel for USD/TRY is more decisively upwards towards 9 on confirmation of market fears of premature rate cuts.
- Intraday Sup1: 8.6126, Sup2: 8.555, Res1: 8.6635, Res2: 8.7492, Res3: 8.8008
USD/TRY
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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