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AUSSIE 10-YEAR TECHS

(Z1) Off Lows, But Remains Weak

USDCAD TECHS

Still Vulnerable

AUDUSD TECHS

Bullish Price Sequence

TURKEY
  • USD/TRY trades flat to slightly higher at the open with the greenback little changed since Friday's sharp sell-off post-NFP data.
  • Although USD/TRY pulled lower to test 8.65 in the aftermath, the move was more subdued relative to its high-beta peers ZAR & RUB, reflecting broad skepticism in TRY assets.
  • Domestic focus this week will be on foreign relations as Cavusoglu meets the French FM to discuss bilateral & Turkey-EU relations and Turkey builds up to the Biden-Erdogan meeting next week (14 June).
  • Meanwhile, Greece has threatened to place sanctions pressure on the EU if Turkey continues to act aggressively in the region.
  • On the data front, we have US CPI later in the week and Turkish industrial production, expected to see a substantial uptick in April.
  • USD/TRY closed +2.07% higher w/w at 8.66, having pulled back from a peak at 8.80.
  • Sell-side remains fairly bearish on TRY assets at this juncture, with CBRT credibility still low, despite a surprisingly lower CPI print at 16.59% supporting its current hold stance on policy rates.
  • With the CBRT meeting next week, markets will be aware of possible dovish comments from Erdogan in the build-up.
  • Intraday Sup1: 8.6399, Sup2: 8.5805, Res1: 8.6972, Res2: 8.7488
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com