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USD/TRY: Risk Premia Compress Ahead of Busy Week of Data

TURKEY
  • USD/TRY trades slightly higher at the open, hovering around 8.2493 support against a mixed risk backdrop out of APAC.
  • Local risk premia seen to be declining somewhat at the start of the week following Thursday's CBRT, with the 5Y CDS taking out the 400 levels and entering the Agbal-induced breakout gap (starting at 306), but remains elevated as investor confidence in the CBRT remains low.
  • With the CBRT in the rear-view mirror, the weekly focus shifts back to local stories and data – with unemployment, industrial production, retail sales, CBRT minutes and current account metrics coming early in the week.
  • Markets remains concerned that the widening CA deficit (exp at 3.80bn vs 2.16bn) will continue to weigh on TRY sentiment over the medium to longer-term.
  • From Wed-Fri, markets will be driven primarily by key US data.
  • Sell-side remains mostly neutral to bearish on TRY prospects in the near-term, despite the recent CBRT hold on policy- with fair value models still placing USD/TRY closer to the 9.00 level.
  • Intraday Sup1: 8.2251, Sup2: 8.2046, Res1: 8.3006, Res2: 8.3319
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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