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SCHATZ TECHS

(M2) Outlook Remains Bearish

US TSY FUTURES

TYM2 Blocked

GOLD

Moves Off Recent Highs

BOBL TECHS

(M2) 50-Day EMA Still Intact

BUND TECHS

(M2) Consolidation Mode

RBNZ

VIEW: ANZ: All Guns Blazing

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TURKEY
  • USD/TRY trades +0.68% higher this morning, paring most of yesterdays move lower towards 13.40.
  • Broad USD weakness supported the move lower, but the cross remains pegged within a wide 13.20-13.94 range – awaiting a breakout for a more decisive near-term direction.
  • The CBRT is expected to leave rates unchanged at 14.00% this week following forward guidance in December alluding to the “complete use” of limited space left to ease.
  • This implies a near-term hold on policy as the CBRT assesses the impending 1H22 surge in CPI towards 50-55%. The widening of negative real yields over the period is expected to weigh on TRY assets against a tightening external backdrop with almost 4 Fed hikes priced in for 2022.
  • Moreover, Erdogan promised further “gradual” rate cuts ahead of the 2023 elections, which should do little to anchor inflation expectations.
  • Analysts remain bearish on TRY and the prospects of the new measures to support stability, citing fiscal and inflationary risks as by-products.
  • Focus today is on phraseology surrounding the path of inflation, with the decision itself being somewhat of a non-event.
  • Intraday Sup1: 13.113, Sup2: 13.1653, Res1: 13.5745, Res2: 13.6614
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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