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USD/TRY Subdued in 8.80-8.95 Range, CPI & Geopolitical Risks In Focus

TURKEY
  • USD/TRY trades +0.08% higher this morning, holding around the 8.886 mark after falling -0.38% on Friday – maintaining bearish momentum from Thursday's session.
  • Today's focus will be on CPI data, with the Bloomberg consensus expecting a rise in headline to 19.65% y/y, but a fall in core (CBRT's new rates benchmark) to 16.62%.
  • GS, however, expect core to rise to 17.3% y/y, but that the CBRT will still deliver a -50bp cut at the next meeting as a mere reflection of the MPC's preferences for lower rates.
  • Additionally, PPI data will be released today, but is expected to show a slight moderation. Most sell-side institutions agree that pricing risks are to the upside in September/October, but should moderate in the Nov-Dec period.
  • Bilateral relations are also on the agenda this week as Turkey seeks to patch ties with the UAE & Egypt, while tensions with Greece and the US (CAATSA sanctions risks) remain elevated.
  • Turkey & Greece are set to hold talks on Wednesday, shortly after Greece signed a defence agreement with France, angering Turkey who claimed the deal was harmful to NATO.
  • Upside momentum in the cross has stalled in the 8.90-8.95 zone, and needs fresh catalysts to move beyond the 9.00 handle.
  • 8.80 stands as a key support, and if broken, may see some short-term tests of lower levels towards 8.6843, but the bias remains for TRY weakness into year end as policy becomes looser. Intraday Sup1: 8.8334, Sup2: 8.8017, Res1: 8.8915, Res2: 8.89371
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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