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USDCAD TECHS

Bullish Price Structure Intact

AUDUSD TECHS

Needle Points South

US TSY OPTIONS

BLOCK, Huge 5Y Put Buy

EURJPY TECHS

Probes The Bear Trigger

USDJPY TECHS

Range Base Holds Firm

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  • USD/TRY opens -0.22% lower this morning with markets relieved that Erdogan fell short of making more destabilising comments regarding CBRT policy and inflation in his evening address.
  • The cross traded choppily following yesterday's US CPI miss, failing to strengthen in line with high-beta peers RUB & ZAR owing to light pre-CBRT positioning and concerns over Erdogan's speech.
  • Today's focus shifts to the CBRT where broad expectations align with a hold on rates at 19.00%, despite rapidly rising CPI.
  • While the CBRT may shift its guidance to convey maximum hawkishness, the market has set a high bar for any material shift in expectations for premature easing against market conditions in the coming months.
  • Although the predominant expectation is for a hold at this meeting, there may be some pre-emptive pricing in of a cut that could cause some post-statement gyrations in USD/TRY and local bonds – but nothing too major at this juncture.
  • Our base case, however, remains for markets to favour fading TRY strength in the coming months as the CBRT reaction function becomes more dovish.
  • Intraday Sup1: 8.5875, Sup2: 8.5516, Sup3: 8.5516, Res1: 8.6399, Res2: 8.6712, Res3: 8.7092