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CHINA RATES

China Repo Rates Diverge on Wednesday

AUSSIE BONDS

ACGB Nov '31 Supply Easily Absorbed

FED

Bullard Strikes Usual Hawkish Tone

RBA

Semi-Government Bond Purchase Offer Details

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  • USD/TRY trades +0.3% high at the open, as early buying pressure lifts the BBDXY and weaker risk sentiment out of APAC filters through into the CEMEA session.
  • The Cross made a notable move lower in yesterday's broadly risk-off session post-FOMC, taking out 8.50 to reach an intraday low at 8.4434.
  • High carry in Turkish assets fuelled yesterday's bout of demand and has been supporting outperformance vs its EM peers since the start of July.
  • However, this may start to fade as inflation ticks in the coming months, eroding carry potential.
  • On the covid front, HealthMin Koca assured the public that most of the new covid infections were among the unvaccinated and this fourth wave may be less severe than prior waves.
  • Trade balance data today is set to improve, which may add further support to TRY.
  • Having moved away from the 50dma, next dynamic support is seen at the 100dma (8.3659).
  • Intraday Sup1: 8.45, Sup2: 8.3843, Res1: 8.4951, Res2: 8.5419